Japanese Cultural Concepts and Business Practices as a Basis for Management and Commerce Recommendations

Term Paper, 2010

28 Pages, Grade: 1,3




1. Hofstede’s Five Dimension Model
1.1 Power Distance
1.2 Individualism & Collectivism
1.3 Masculinity & Femininity
1.4 Uncertainty Avoidance
1.5 Long-Term & Short-Term Orientation
1.6 Conclusion to Hofstede

2. Japanese Cultural Concepts & Business Practices
2.1 Group Mentality & Harmony
2.2 Building Long-Lasting Relationships
2.3 Communication
2.4 Working & Decision-Making Process
2.5 Customer & Stakeholder Orientation
2.6 Continuous Improvements
2.7 Everyday Business Etiquette
2.7.1 Business Dress
2.7.2 Conversational Guidelines
2.7.3 Gift Giving
2.7.4 Business Negotiations
2.7.5 Evening Entertainment

3. Conclusion: Business Recommendation



From the moment we are born, our environment influences us in the way we think, act, and feel. Our parents and siblings, friends and superiors, even acquaintances and strangers teach us what is socially acceptable and expected behavior so that we are able to fit in with our peers, colleagues and fellow citizens. This “mental software”1 usually stays with us and evolves throughout our whole life, coloring our every word, thought, and action. It differs from our human nature and our personality in the way that it is neither genetically programmed into us, nor uniquely ours.2 We usually refer to it as ‘culture’.

According to Dutch researcher Geert Hofstede, culture is “the collective programming of the mind which distinguishes the members of one group or category of people from another.”3 Of course, we usually are part of many different groups at once - maybe we belong to a sports team or company, a confraternity or a club, a family or a special circle of friends - all of which have different values, rituals and expectations. This leads to “people usually carry[ing] several layers of mental programming within themselves, corresponding to different levels of culture.”4 However, while we join some groups voluntarily, we are born into others - like our family and nationality - and therefore cannot revoke our membership and the expectations that go with it. So while we voluntarily accept one culture’s rules and idiosyncrasies because we want to, we might accept another’s merely because they were drilled into us since we were children. By name, these differing dynamics can be referred to as national and organizational culture.5

An extensive research project conducted by Hofstede in the 1970s, during which employees of a large multinational corporation in 64 countries were questioned, was supposed to reveal the intricacies of national culture. What he found were four distinct dimensions by which cultural differences can be comprehended - power distance, uncertainty avoidance, masculinity/femininity, and individualism/collectivism. A subsequent study conducted amongst students in 23 countries revealed a fifth dimension influencing people’s ways of thinking and acting, the long-term/short-term orientation. These five dimensions and what they entail can help us understand another culture’s behaviors, attitudes and actions in private as well as in business settings.

The following paper will first take a closer look at Hofstede’s 5D-model6 as a basis for understanding the cultural intricacies foreigners need to be aware of when dealing with other nations, in particular with the state of Japan. After shining light on the dimensions defined by Hofstede, those peculiarities of the Japanese culture that are of special importance when doing business with the nation, with an emphasis on major concepts of thinking and acting, as well as everyday behavioral tips, will be presented. All the information gathered in the first two parts of this paper will then be used to appraise whether a German company’s plans to breach the Japanese market are sound and promising, or whether the cultural differences will most likely make a successful expansion impossible.


In the following chapters, Hofstede’s five dimensions of culture will be introduced and illustrated with examples from each end of the respective spectrum. However, since this paper deals mostly with the differences in culture in a business environment, examples will only include aspects that are either directly related to conducting business, or influence the way of negotiation in some way. Even though Japan’s scores in each dimension will be mentioned so that the reader can see in which direction the country leans, there will not be concrete examples of business practices or cultural traditions in this part yet, since these will be dealt with in detail at a latter stage.


Power distance is the first of the five dimensions and describes “the extent to which the less powerful members of the organizations and institutions (like the family) accept and expect that power is distributed unequally.”7 In a way, the dimension measures the level of dependency prevailing in a society.8

Power distance is already established during one’s childhood. In large power distance societies, children are treated with much love and care, but are also expected to obey their parents unquestioningly and to always show respect for one’s elders, regardless of one’s own age. What is impressed upon the children from birth on in the family environment, is fortified in school, where students neither speak up unless a teacher calls on them, nor would ever dare to contradict.

This obedience and deference is a concept completely at odds with small power distance societies, in which children are usually treated as equals by the adults and are encouraged to become independent and form their own opinions from a very early age on. Asking questions, contradicting teachers, and speaking up are not only accepted, but expected behaviors.9

It is not surprising that the attitudes and values learned during one’s childhood, especially how to act towards one’s elders, are later transferred to one’s superiors in professional life. In societies with a large power distance, employees will wait for their superiors to approach them and would never oppose anything their employer decides - trusting him to

only make decisions that are right and beneficial for the group - while in small power

distance societies it is quite normal and even a sign of dedication to one’s work when staff members actively approach superiors, expect to be included into decision making processes that affect their work, and, if necessary, disagree with what they are being told.10

While both society types depend on hierarchical systems to manage working relationships, in countries with small power distance scores, these systems are usually very flat and adaptable. Employees from many different levels work together and give their input, while receiving a similar monetary compensation for their work. It is also possible for employees to move up and down the job ladder according to their performance and young superiors are very common. The opposite is true for countries that score high on the power distance index, where employees are waiting for their superiors to tell them what to do, the salaries sharply differ for different positions, and older superiors are usually seen as wiser and more experienced and are therefore trusted more.11

Japan scores a 54 (out of 100) on the power distance index and is therefore located at the moderate end of a large power distant society.


Individualism and collectivism describe “the degree to which individuals are integrated into groups.”12 According to Hofstede, “[i]ndividualism pertains to societies in which the ties between individuals are loose: everyone is expected to look after himself or herself and his or her immediate family. Collectivism…pertains to societies in which people from birth onwards are integrated into strong, cohesive in-groups, which throughout people’s lifetime continue to protect them in exchange for unquestioning loyalty.”13

The concepts of individualism and collectivism are imparted from a very early age on by the family structure one is born into, and have a huge influence on one’s whole life. In individual societies, children usually grow up with their parents and, if applicable, their siblings - or in a “nuclear family,”14 as Hofstede calls it -, being taught and learning to become individuals with their own distinct personality traits and opinions, whose interests overrule those of the group. The bond between parents and children is often fragile, with the offspring often reducing or even severing the ties to the parents when they reach adulthood.15 Children are encouraged to think for themselves and to speak up about how they feel, even if it leads to confrontations, which are considered an everyday part of family life.

In collectivist societies, on the other hand, an extended family is the norm, meaning a child does not only grow up with parents and siblings, but with grandparents, aunts, uncles, and cousins all being extremely close and often even living together. Children learn to see themselves as part of this group rather than individuals and are taught that the interests of the group prevail over their own opinions and desires. Avoiding confrontations is an essential part of retaining the harmony in such close-knit and closely bound coteries, leading to a culture of ambiguity and indirectness, in which the word ‘no’ is rarely spoken and differing beliefs are not voiced in order to evade conflicts. In fact, opinions are usually determined by the group rather than formed by the individual and falling out of line is considered a betrayal of loyalties and can ruin one’s social contacts and relationships forever.16

Due to these particular conventions, collectivist cultures usually develop their own brand of non-verbal communication that is difficult for non-group members to comprehend and retrace. While in individualist cultures most information can be found in an explicit, easy to understand form - a practice commonly referred to as low-context communication -, “most of the information [in collectivist cultures] is either in the physical environment or within the person,”17 and therefore does not need to be written down.

Group or ‘family’ memberships in collectivist societies also extend to one’s professional life. “The relationship between employer and employee…resembles a family relationship with mutual obligations of protection in exchange for loyalty.”18 Companies prefer to hire the relatives of current employees over ‘strangers’ - a practice that would be frowned upon as nepotism in an individualist society; employees will act according to what is beneficial for the group - and usually only feel comfortable when acting as part of a group -, even if that means disregarding their own needs and opinions, and employment usually lasts for life. Unsatisfactory performance or mistakes made on the job are not seen as reasons for dismissal in collectivist societies. In fact, giving notice to a staff member or leaving a company in favor of a better job offer are usually seen as a violation of loyalty and can lead to severe social consequences.

As the previous paragraph suggests, personal relationships stand above everything else in collectivist societies, however, only when it comes to members of one’s in-group. ‘Outsiders’ are not privy to the same loyalty and preferential treatment, but are usually met with indifference or even animosity. This goes against everything the individualist culture stands for, which is convinced that all customers and business partners should be treated alike. A consequence of the collectivist way of thinking is the importance of establishing a relationship filled with trust before any kind of business can actually be conducted, since only when one has been adopted into an in-group will the group be willing to deal with them and give them the same treatment all group members receive.

Whereas in an individualist culture, a person will feel guilty after breaking a law or rule, regardless of whether someone actually finds out about the breach, in a collectivist culture that person would feel shame, but only when the transgression becomes known by others. The feeling of shame is closely connected to a concept foreign to individualistic societies, namely that of losing face. “Face is lost when the individual, either through his action or that of people closely related to him, fails to meet essential requirements placed upon him by virtue of the social position he occupies.”19 The humiliation a person feels by e.g. being scolded or criticized in front of others, leads to a disruption of their social relationships and group dynamics and is therefore avoided as much as possible.

With 46 points, Japan scores about halfway on the individualism-collectivism index and therefore can be expected to almost equally combine characteristics from both ends of the spectrum.


“Masculinity versus its opposite, femininity, refers to the distribution of roles between the sexes (…).”20 While “masculinity pertains to societies in which social gender roles are clearly distinct (i.e., men are supposed to be assertive, tough, and focused on material success whereas women are supposed to be more modest, tender, and concerned with the quality of life)[,] femininity pertains to societies in which social gender roles overlap (i.e., both men and women are supposed to be modest, tender, and concerned with the quality of life.).”21


1 Hofstede (1997), p.4

2 see Hofstede (1997), pp.5/6

3 Hofstede (1998), p.8

4 Hofstede (1997), p.10

5 Hofstede (1998), p.8

6 ‘5D’ stands for ‘five dimensions’

7 Hofstede (1998), p.11

8 see Hofstede (1997), p.27

9 see Hofstede (1997), p. 32

10 see Hofstede (1997), p. 27

11 see Hofstede (1997), p. 36

12 Hofstede (1998), p.14

13 Hofstede (1997), p.51

14 Hofstede (1997), p.50

15 see Hofstede (1997), p.51

16 see Hofstede (1997), p.58

17 Hofstede (1997), p.60

18 Hofstede (1997), p.64

19 Hofstede (1997), p.61

20 Hofstede (1998), p.14

21 Hofstede (1997), pp.82/83

Excerpt out of 28 pages


Japanese Cultural Concepts and Business Practices as a Basis for Management and Commerce Recommendations
Stuttgart Media University
Interkulturelles Management
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ISBN (Book)
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japanese, cultural, concepts, business, practices, basis, management, commerce, recommendations
Quote paper
Nicole Hein (Author), 2010, Japanese Cultural Concepts and Business Practices as a Basis for Management and Commerce Recommendations, Munich, GRIN Verlag, https://www.grin.com/document/183364


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