When thinking about negotiations one might not realize how often that we negotiate in our everyday lives. Almost every activity that we do, especially when involving more than just ourselves, involves negotiations in some way, such as should we eat at Burger King or at McDonalds. You negotiate with someone else or even yourself in your decision. Negotiations are also very important in business dealings. The negotiation can make or break a business deal and even ruin the relationship of the two parties. Negotiations are a fine art that is very difficult to master, if the mastering of it is even possible. Different people negotiate in different ways, but every society follows the same basic guidelines for the most part. This is not true whenever you look at different cultures and their negotiation styles and tactics. Sometimes these styles can be very different from what we have grown a custom to. The United States for example has negotiation styles and rules that differ quit a bit from those of the Japanese. This is why it is important to keep these differences in mind when dealing with the Japanese whether it involves business or personal issues. For the sake of simplicity, we will be looking mainly at the business aspect of negotiations. This report will cover the basics of negotiation with the Japanese. This is only a brief guideline; one should keep in mind that if you are planning to take this subject further much more research should be done to fully understand all aspects of this area.
The beginning of a negotiation can be a very critical one. For the most part, Americans want to jump right in a get down to business. This is do in mainly to our society and it’s fast paced way of doing business. We live in a fast paced world and feel that things need to be done quickly. This is not the same feeling shared by the Japanese though. When negotiating with Japanese, they like to take the time to get to know the other party first. They give great importance to trust when dealing with others. They need to know more about the other party in order to achieve trust in them. If Americans expect a negotiation with Japanese within the U.S. framework of a brief introduction, discussion of technical matters, supply and cost bargaining, and closing, they will surely be disappointed. Japanese, on the other hand, will feel rushed and pressured if they discover they will not spend much time finding out about the school backgrounds, relative company status, and family backgrounds of U. S. negotiators. Japanese need to feel a sense of harmony and cooperation. Without this phatic communication, of what from a U.S. perspective is trivial information (but nonetheless has an important function of building trust). Japanese feel that their relationship is not anchored and may drift. This is an uneasy situation in the extremely competitive world of Japanese business (McCreary p25-26). After this information is shared the Japanese will feel that they can enter into the negotiations. The negotiation normally follows the same pattern, or stages. After the introduction and the gathering of trust, the next stage is usually made up of the technical details of the product. The Japanese often insist on every single detail being explained several times. This once again is due to the issue of trust. They try to see if the details vary at all. The bargaining stage normally follows next. The U.S. style of negotiations normally causes the U.S. team to focus on prices that will be too high or too low. In contrary, Japanese normally shot for prices that are more reasonable. More of this will be discussed later. The final stage involves the strategies that lead to the signing of the contract. It is very important to keep in mind that the Japanese feel that a product that is not up to standard, that was presented in the negotiation are looked on as being shameful to the individual. They value the honesty of a deal and those involved in the deal very much.
When doing business, many American companies rely on contracts to bind the agreement. The contract is looked at as the tangible goal of most business negotiations. Without a contract or some type of written agreement it is very unlikely the deal will last. It is very unlikely, that if a problem occurs and a third party is needed to solve that problem, that the deal will even be recognized without a contract. This is different to the Japanese way of business. Contracts are foreign to the Japanese way of doing business, and Americans would do well to keep this fact in mind when doing business with the Japanese (Zimmerman, p.91). This dislike of contracts once again relates to the importance that Japanese put into trust and integrity. Many Japanese will not even bother to read a contract before signing it because they don’t attach substantive importance to it (Ibid, p.91). Although this practice is okay to do in Japan it often causes problems in the U.S. and other Western areas. This is also troublesome when someone who does value a contract finds that there may be no punishment in Japan if the contract is broken. This is why it is very important that both parties have a mutual understanding of the contract and what it entails prior to the signing. If this is not done than one of the parties, if not both, have a good chance of being upset by some future happening. This would not only be unfortunate at the time of the occurrence but it could also lead to the two parties ending any type of relationship which could hurt both parties morally and financially.
Part of the suspicion that the Japanese have toward contracts derives from the change in their situation over the past thirty years (Ibid. p.93). This suspicion is caused by the Japanese distrust of the foreign partners that they dealt with in the sixties and seventies. During this time of rebuilding they depended on others for much of the technology needed to rebuild their country. Now that they have gained a competitive edge in today’s technology, they do not want to deal with the same partners as before. It is beneficial to any firm doing business with the Japanese to assure them that both are on equal ground and will receive equal and fair treatment and respect. This will help the Japanese feel more comfortable about a contract and more willing to sign and agree with one. There is also a pact per say with the Japanese national bank that allows Japanese countries to render some of the financial burdens of a contract if the bank is notified of the contract and approves it at least thirty days in advance. This relieves some of the tension involved with signing the contracts.
There are four important, complex, and interrelated Japanese concepts that have a strong influence on how the Japanese do business and conduct their personal lives (Ibid. p.64). These four concepts are Nintai (patience), kao (face), giri (duties), and on (obligations). Nintai, all though there is no direct English translation, means in a business context that one has the endurance and intellectual capability to uncover methodically and carefully every factor that might have even the slightest bearing on a business decision or the outcome of a negotiation. This includes many aspects of negotiations including the sides taking enough time to think about and thoroughly prepare themselves for the negotiations. If you are lacking in nintai you run the risk of constantly being in danger of losing kao (face). Kao is considered to be the most precious commodity a Japanese has. When someone in Japan has a spotless kao they are looked upon buy their peers, employers, coworkers and family as being in tune with society. One of the worst mistakes anyone can make in their dealings with Japanese is to put down their work and embarrass them in front of others. The best action to take if you are not pleased with some ones work is to talk to them in private. You must try to be very gentle in your explanation of your dissatisfaction and emphasize on the person’s strong points. If you do not take extreme care in this you are sure to upset the person and could possible earn a lifetime enemy. The last two concepts that one needs to understand is that of giri (duties) and on (obligations). To help understand the importance of these two concepts one must comprehend one fact about the Japanese. The Japanese tend to take every debt and obligation received during life as a personal weight on their shoulders. Although through repayment of favors and help, these debts can be somewhat repaid but they can never be fully restored. A more accurate description of on is the obligation incurred by giving and granting major favors, such as giving birth or taking care of some ones education. When one receives on from another it is expected that they spend most of their life trying to repay it in some form, although the Japanese feel that you can never fully repay the debt. Of the two concepts, giri seems to be the less serious of the two (Ibid, p.64). Giri is the exchange of small debts and obligations that occur on an everyday basis. Such examples would be the giving of a small gift to another. Giri even takes into consideration the welcome that you receive when walking into a Japanese restaurant. You are not expected though to spend your life trying to repay this gift though. It is taken that everyone gives and receives giri several times throughout a normal day. One must keep in mind that in the Japanese society one cannot escape the massive web of obligation created by giving and receiving gifts. It is very important to also remember that next to insulting ones kao is to refuse a gift.
Japanese and American negotiating styles are a study in contrast (Tenhover, p.223). The two societies have very different ways at looking at negotiations and ways to do business. Were Japanese feel that one should take into concern emotional sensitivity and take a more indirect approach, Americans prefer to take an impersonal stance and a more direct to the point approach. Americans tend to work were there is the best chance and opportunity for them to advance regardless if they have to leave a company which they have been with for a long time. The Japanese on the other hand tend to stay with a single company for their entire work life and show great loyalty toward that company and its ideas. As discussed earlier, the Japanese take much care in not being embarrassed in front of others. They find this very offensive and one of the worst acts one can do to another. Americans, on the other hand, feel that it is strictly business and are not afraid to put someone down in front of others. It is looked upon as part of the job. Japanese are not argumentative, even if they are right. They tend to avoid confrontation to save personal relationships. The American approach is somewhat different. They will argue to great extent even if they are wrong.
The American thinking of negotiations is often perceived as an opportunity to sit down and beat out an agreement trough debate and confrontation. We focus on the give-and-take approach and are allowed to make spontaneous decisions. We find great pleasure and prestige in being persuasive and are given a lot of leeway in our options to make an agreement. Most of all, Americans see negotiations as problem solving exercises (Ibid. p.222). Japanese thinking about negotiations is somewhat different. They do not like the open debate and arguments. This often disturbs and embarrasses them especially when they are in a formal situation. They prefer that persuasion be handle behind the scenes were both parties are assured they will not loose face. They are also against the American way of give-and-take when at the negotiating table. The surprises and open displays of power that are often integral parts of adversarial proceedings in America are not tolerated in Japanese society (Ibid. p.223).
A main difference in the American and Japanese negotiation styles is that of the American “John Wayne” way of negotiation. Americans often feel that four or six Japanese negotiators against one American is no big deal. This is partly due to the American idea that less people means less money sent. This is not a wise approach, you do not want to be outnumbered and especially not alone when negotiating with the Japanese. Think about how much closer you could pay attention to the person talking if you did not have to continuously think ahead to the next question. Japanese often have a great advantage in these situations because they are rarely outnumbered when doing business with Americans. The Japanese negotiating style is one of the most distinctive styles in the world. The typical Japanese negotiating manner is characterized by intuition, indirectness, disguising or suppressing real feelings, persistence, avoidance of self praise, and diligent information-gathering about the other side’s needs and intentions. The historical and cultural roots of the Japanese style run much deeper than those of the American style (Ibid. p.228). A major reason that Japan has a different negotiating style is do to its natural environment. There are three major environmental factors that are important when looking at its negotiation style and the reason it is the way it is. First, cooperation is essential in Japan du to its isolation and mountainous geography. Second, obedience and cooperation are extremely essential because Japan I one of the most densely populated countries in the world. Finally, the Japanese philosophy that the importance of the group takes precedence over that of the individual cam from the historical importance of rice cultivation. This required a community effort that reinforced the importance of group cooperation.
One last important difference in the different negotiating styles is that of language. Americans always seem to want to do business in the English language no matter who they are dealing with. This is partly due to the fact of English being thought of as the international language of business. Although it is rare that Americans can fluently speak more than one language it is not unusual for Japanese person to speak more than one language. Do to the fact that Americans always want to deal in the English language, it can lead do some disadvantages for Americans. The first disadvantage is that which occurs when using a translator. A translator might be useful to the other party but they might know the language fine and be using the translator as an advantage. A translator gives them more time to think of a response, they can concentrate more on the other parties body language and then have the verbal replayed to them, and the translator might not be neutral. Having a bias translator could greatly put the Americans at a disadvantage. It would add yet one more person who is going to come up with ideas contrasting to yours. A second problem is that using English put the power of selective understanding in you opponents’ hands. This allows them use a “I don’t understand” or “that’s not what we agreed to” approach. They can always use a misunderstanding to try to get the deal in their favor. The third disadvantage is our tendency to compare speaking with power. We have a tendency to believe that whoever can speak the best is the smartest and most powerful. This is not always the case. Often it is the younger Japanese businessman who can speak English better than and older Japanese businessman. This will often lead the American to believe that the older man is not as wise, which could be a bad mistake. It is normally the older who is wiser and better when it comes to negotiating a deal. The Americans, thinking that the younger of the two is smarter, might focus all their persuasiveness toward the younger person, which would be pointless, because they would not be making the deal.
As touched on before, it is not always in the best interest of Americans to use translators. It could put the American party at a disadvantage allowing the Japanese to reach a beneficial agreement easier. It is important thought if you are using a translator that you take the proper steps to ensure that you will be represented as accurately as possible. There are certain steps that you can take in order to make sure that you are represented as accurately as possible. You should try to get a translator who is familiar with the specific field that you are going to be dealing with. You need to speak slowly and distinctly and try to avoid using slang, sport talk, obscure expressions, or superfluous words. It is wise to brief your translator ahead of time as thoroughly as possible. If you are giving a talk or presentation, give them a copy of it and allow them time to review it and ask any questions they might have regarding words or language you might be planning to use. If you do not have a copy try to cover the major points that you will be discussing so they are clear on what you are trying to convey. Use short sentences and do not talk to long without a pause. This allows the translator to better translate what you have said and it also keeps the other party from having to sit a long time without understanding what is being said. When speaking look at your counterpart, not at the translator, and try to avoid making assumptions of any king. If your interpreter asks you many questions that seem unwarranted, get a new interpreter (Rowland p.68). It is also a smart choice to get your own translator instead of using one that the company that you are dealing with has provided you. It is also beneficial sometimes to use an older translator because they can lend you credibility and respectability, however they might not be as fluent in the English language. It is also important that you are very patient and take plenty of breaks to allow the translator to relax and also use this time to gain any insight that you might be able to get from the translator.
It might best be said that a negotiation with Japanese is “closed” when U.S. negotiators and their company have convinced the Japanese of their credibility, trustworthiness, and long-term commitment (McCreary p.67). A sense of closing a negotiation can occur in a very early stage of negotiating or it can occur after the exchange of money or gifts. No matter when it is achieved one thing is for certain. It is very unlikely that a negotiation will be closed before the Japanese feel a sense of trust in the other party. It is important that the Japanese do not feel rushed or bullied into an agreement, if this is the case the negotiation is sure to fail. It is important that patience, functionally speaking and the ability to wait out the Japanese side is used and always kept in mind. The Japanese also double-check just about every detail and then ask for further explanation. The reason for this is that Japanese believe information gathering is one of the ways they can become more confident and comfortable with a new business arrangement (McCreary p.67). When negotiating with the Japanese it is critical that you keep in mind that the Japanese have a certain way that they want to do business and if you want to close a negotiation with the Japanese you need to play by their rules.
When trying to master the art of negotiations it is very important that you keep numerous tactics and skills in mind. You need to be aware of whom you are negotiating with and their principles and ground rules for negotiations. Not everyone goes about negotiating in the same manner. There are as many ways to negotiate, as there are people to negotiate with. Obviously, we are only human and make mistakes. It is also true, that when dealing with the Japanese, some will expect you to follow their guidelines and some will follow ours. If is a giant guessing game and the best way to be prepared is to study your counterpart. If you go into the negotiation planning on using their ground rules, you will have a much better chance at success. It is very important to keep in mind that when you are negotiating with the Japanese that trust is a major key of how well the proceedings will go. Without mutual trust, it is very unlikely that the negotiations will be of much use. It is also necessary that you have patience and do not offend your Japanese counterpart. If you keep in mind the important proceedings regarding Japanese negotiations and you have a good game plan, you will have great success in your dealings with the Japanese. It is also very likely that once you have dealt with a Japanese business and everything went well it would be easy to continue business with them.
Faure, Guy Olivier. Culture and Negotiation; Sage Publications, Newbury Park, CA, 1993
McCreary, Don. Japanese-U.S. Business Negotiations; A Cross-Cultural Study, Praeger Publishers, New York, NY, 1986
Nicholson, Michael. International Relations; New York University Press, New York, NY, 1998
Rowland, Diana. Japanese Business Etiquette; A Practical Guide to Success with the Japanese; Warner Books, Inc., New York, NY, 1993
Tenhover, Gregory. Unlocking the Japanese Business Mind; Transemantics, Inc., Washington, DC, 1994
Zimmerman, Mark. How to do Business with the Japanese, Charles E. Turtle Co., Tokyo, Japan, 1987