NTU workshop ”Japanese Businesses Culture”

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Workshop for NTU JAC Japanese Businesses Culture

21 September 2015

Michiaki Lee

Today’s Agenda

Japan Economy Snapshot – Global Expansion

Japanese Businesses in Singapore

Current Challenges of Japanese Corporations

Strengths & Weaknesses of Japanese Business Culture

Cross Cultural Understanding

How Young Business Professionals Grow in Japan

New Leadership - Emerging Entrepreneurial Business from Japan

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Japan Economy Snapshot

– Global Expansion

Global Macro Economy

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Japan is the 3rd largest country in GDP

Japanese Economy – Past Trend

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Lost Decades Bubble Rising Sun

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Rising Sun ～ “Bubble” Economy(Before 1990)


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Success Factors

Growing Demands

– Population Increase / Wage Increase

People

– Highly Educated Workers / Team Work / Hard Work

– Diligence

Efficient Process

– High Security (Safest Country)

– Life-Time-Employment System

Highest Quality Products and Services

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Global Companies Leaned from Japanese Method

5S

– Sorting (Seiri)

– Setting in Order (Seiton)

– Shining (Seiso)

– Standardize (Seiketsu)

– Sustain (Shitsuke)

Kaizen

– "improvement" or "change for the best"


Many Countries Learned from Japan

Management Style before 1990’s

Japanese “Legacy” Management Style

Life Time Employment

Seniority

Hard Work / Long Work

Well Organized Structure

Patience

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Those Worked !

Bubble Collapse

What was Happening?

Speculative money

Real estate values were extremely over-valued

Large amount of loans

Large number of defaults

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After the “Bubble” Economy (After 1990)

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“Lost Decades”

Over Valued Assets (too much investment)

Over Capacity / Financial Deficit

Decreasing & Aging Population

Lower White-Color Productivity

Global Competition

Deflation, Minus GDP Growth,

Unemployment

Paradigm Change During the “Lost Decades”

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Limited Japan Domestic Market Growth

Rapidly Growing Asian Markets

New Technology

Advanced Information and Communication Technology

Globalization

Low Cost Labors Outside

China and other Emerging Countries

Customer-Centric World

Consumers are more “Savvy”

“Hard” to “Soft”

“Product” to “Services”

Increasing Overseas Businesses

Overseas revenue share is increasing

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Japan Bank for International Cooperation N=625

Overseas Revenue of Japanese Companies

Expanding in Asia Region

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Number of Japanese companies increase

Ministry of Foreign Affairs

Reasons of Global Expansion

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Limited Japan domestic market growth

Maturity of domestic demands

Aging society and decreasing population

From “producing market” to “consuming market”

Low cost labors outside

Rapidly growing consumer markets in emerging countries

Borderless world

Advanced information and communication technology

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Japanese Businesses

in Singapore

Why Singapore

English as a common language

Geographic advantage

Safety / Transparency

Talent acquisition

Showcase of other Asian markets

Tax incentives, etc

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Strategic Focus on Singapore

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Examples of “Singapore shift”

• Transferred metal resource trading HQ from Japan to Singapore

• Moved the headquarters of its procurement and logistics

operations from Osaka to Singapore

• Developed “SONY University” in Singapore

Variety of Industries

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Many consumer goods & services

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Current Challenges of Japanese

Corporations

10 Issues of Japanese Companies in Asia

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1. Wage increase (71%)

2. Competitors’ market shares are growing (53%)

3. Skills and mindsets of employees (53%)

4. Quality of employees (47%)

5. Quality control (45%)

6. Difficulty of procurement (43%)

7. Difficulty in hiring future leaders (42%)

8. Price competition (40%)

9. Increasing material costs (40%)

10. No more room for cost cutting(40%)

JETRO Survey of Japanese-Affiliated Companies in Asia and Oceania

Challenges of Japanese Companies

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Lack of diversity

Many top managers are internally promoted

Still few foreign talents – Lack of outsider viewpoints

Confidence in high quality

Consumers may not need the “Highest Quality”

Too big to rapid change

Conservative and careful decision making process

Different HRM concepts

“Lifetime employment” “Seniority based management”

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Strengths & Weaknesses of

Japanese Business Culture

Fact - Students’ Voice (2014)

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Most respectable Japanese company

N=74


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Strengths of Japanese companies

N=72


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Weaknesses of Japanese companies

N=75

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Cross Cultural Understanding

Difference of Diversity

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Singapore Japan

What does it mean? And why?

What is Culture ?

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“Software of the Mind”

(Geert Hofstede)

Cultural Iceberg

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Agricultural Society

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Population: 126 million

Life expectancy: 83

Birth rate: 1.4

Mountain area: 73%

4 Seasons

Climate Change (from 0 to 35)

Agricultural Society

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What are their behavioral norms?

Hierarchy

Group Orientation

Managing Uncertainty

Long Term Orientation

Hierarchy

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Respect Seniors

People care age and position

(Business cards, seating arrangement, etc)

Saving Face

Multi layer decision making

Customer vs. Supplier Relationship

(Customer is God)

Group Orientation

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In the Japanese society, individual identities usually

derived from groups where they belong to (family, school,

company)

Companies think employees as “Family”

“Lifetime employment”

Most employees don’t choose job assignments

“Keiretsu” (Treat group companies first)

Group Orientation

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• Set group goals

• Hold regular morning

meeting to share same

information

Examples

• Mutual support

sometimes across job

scopes

• Interim sharing

• Team-bonding activities

• Share results together

• Rewards not only for

individual results, but

also team efforts

Goal Setting Business

Process Group Outcome

Group Orientation

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What does it mean?

cd

cd

cd

Western Countries Japan


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How do the Japanese prepare for uncertainties?


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Japanese managers usually requires detailed plans and

analysis before starting new initiatives

When they collect information, they need it accurate,

updated, and “no-error”. They sometimes need “nice to

have information “ for “back up data”

They are likely to have more meetings to make multiple

consensus with stakeholders to avoid conflicts/objections

When proceeding project works, managers usually

expect “interim update” to make sure that the project is

“on track”

Long Term Orientation

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The first meeting may focus on establishing an

atmosphere of friendliness, harmony and trust. Allow a

few minutes of polite conversation before beginning

business meetings

It may take several meetings to develop mutual trust.

However, if once they get closer each other, they feel

more comfortable to talk and things are likely to move

smoothly

Case Studies

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Case 1

Okada-san, an insurance planner, visited his prospective client

and introduced himself. During the meeting, they talked about

general topics but not related to anything about the insurance

products. Okada-san left from the meeting feeling very

satisfied.

Why do you think he felt that way?

Case Studies

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Case 2

Both Sato-san (Mitsubishi Corp) and Tanaka-san (Sumitomo

Corp) like drinking beer. During a dinner, Sato-san ordered 2

bottles of Kirin beer and offered 1 to Tanaka-san. However,

Tanaka-san rejected it and ordered Asahi Beer.

What is happening?

High Context Communication

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Indirect Communication

Many ambiguities

Indirect feedback

Avoiding confrontation

Read Atmosphere

Important decisions are sometimes made at informal

places

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How Young Business Professionals

Grow in Japan

Education System

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What are the differences?

Primary School

Secondary School

High School

University

6 years

3 years

3 years

2-4 years

Professional Career

Institute

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Japanese children are taught to act harmoniously and

cooperatively with others from the time they go to pre-

school.

The Japanese educational system emphasizes the

interdependence of all people, and Japanese children are

not raised to be independent but rather to work together.

Education System

Student Life

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What are differences?

Study

Zemi (Study Group)

Bukatsu / Circle (Extracurricular activities)

Baito (Part time job)

Party

Singapore – Job Hunting Criteria

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N=66 (Multiple)

Japan - Job Hunting Criteria

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DISCO (Multiple)

Singapore - Leading Employers

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Singapore's 100 Leading Graduate Employers (2014)

Company Industry

1 PwC Accounting & Financial Management, Consulting

2 EY (Ernst & Young) Accounting & Financial Management, Consulting

3 DBS Bank Banking & Financial Services

4 KPMG Accounting & Financial Management, Consulting

5 Singapore Airlines Logistics, Transport, & Supply Chain

6 Citi Singapore Banking & Financial Services

7 Microsoft IT and Technology

8 Ministry of Education Public Sector

9 Deloitte Accounting & Financial Management, Consulting

10 J.P.Morgan Banking & Financial Services

singapores100.com

Japan - Leading Employers

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Popular employers in Japan (2014)

Company Industry

1 Sumitomo Corporation Trading

2 Mitsubishi Corporation Trading

3 Itochu Trading

4 BTMU Banking & Financial Services

5 Marubeni Trading

6 Tokio Marine Insurance

7 Mitsubishi UFJ Trust Banking & Financial Services

8 SMBC Banking & Financial Services

9 Mizuho Bank Banking & Financial Services

10 Mitsui & Co. Trading

Diamond

Specialist vs Generalist ?

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“T Shaped Career”

Marketing Sales IT Finance Operation

Job Scope

Specialty

Example

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New Leadership in Japan

Emerging Japanese Businesses - Cases

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UNIQLO (Fast Retailing)

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Overview

• Fashion Retailer (6.2% of Japanese Market)

• Revenue USD11.5 Billion (37% outside Japan)

• 2,753 Outlets

Source: Website, 1USD=120JPY

UNIQLO – Success Factors

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Strong Commitment to Globalize

Rapid Decision Making / Strong Execution

Local Talent Management

Risk Taking – “Willingness to Fail” to Learn

Learn from Other Players

Higher Performer, Higher Rewards

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Overview

• Internet Commerce Platform

“Online Shopping Mall”

• Revenue USD5.0 Billion

• 98 Million Users

• 41,442 Merchants

• Portfolio

• Bank, Security Broker, Travel Agent,

Payment, Baseball Team

Source: Website, 1USD=120JPY

- Success Factors

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Technology

M&A, Diversification

Speed

Consumer Reach

Win + Win + Win

(Rakuten + Consumers + Merchants)

Commit to Globalize (“No more Japanese company”)

• English as the primary language

Summary

Core values of Japanese business are universal & essential (Quality, Service, Diligence, Integrity, Hospitality, etc)

Although big Japanese companies are slow to change, they commit to develop young high potential talents for longer term perspectives

New entrepreneurial companies don’t stick to old legacies

Japanese companies definitely need foreign talents (non-Japanese) to drive global business in future

Generalist career might be one option to explore career of future senior management

Important thing is to keep upgrading your skills as well as widening your sights (external focus) , and always understand your fair values

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Michiaki Lee

李道明

In Singapore and Japan, Michiaki Lee designs and provides corporate trainings to multinational companies.

Prior to that, he has worked as a trading specialist at Citibank Japan and a strategy consultant at PwC Japan, and has also managed several startup companies.

He graduated from Keio University and has an MBA from Babson College

F.W. Olin Graduate School of Business.

He teaches at NUS and University of Newcastle as a guest lecturer.

He is a native speaker in Japanese.

Email:

[email protected] / [email protected]

Feel free to connect

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NTU workshop ”Japanese Businesses Culture”

Education

Transcript of NTU workshop ”Japanese Businesses Culture”