Banyan

Asia

Japanese corporate culture

Opening up

Jul 21st 2010, 9:57 by T.D. and K.C. | TOKYO

JAPANESE firms are an insular lot. Executives typically stick with one company for life and bosses are promoted from within. This makes the decision by U-Shin, a mid-sized maker of car parts, to look outside for a new president, all the more radical. The company believes it needs a young, English-speaking boss to replace its current president (who has been in place for more than 30 years). Not only is U-Shin looking for candidates from outside the company, but it is taking the highly unusual step of running newspaper adverts to attract them.

It is symbolic of a big shift in corporate Japan. In recent years a few very large companies like Nissan and Sony have named bosses not only from outside the company but outside the country, to push though tough reforms and globalise its operations. However, U-Shin's atypical move suggests that the need to break with tradition and internationalise management is beginning to be recognised down at the level of medium-sized business, the very heart of Japanese industry.

U-Shin, a stockmarket-listed firm with around $650m of annual sales, seeks a director who not only understands Japanese culture, but also has a firm grasp of the company’s place in the global market. This could either be a foreigner, or a Japanese executive with managerial experience abroad. The salary is around ¥35m ($400,000).

The need for globally-minded bosses is finally being understood in Japanese boardrooms. In the past, being sent overseas was usually the corporate kiss of death: those marked for the top were kept in Tokyo for grooming. However, this year there has been a string of appointments of company bosses with substantial international experience. Meanwhile, companies like Toyota and Uniqlo, a clothing brand, are promoting more foreign managers, and firms like Nomura, a stockbroker, and Rakuten, an e-commerce site, are holding executive meetings in English.

Yet despite having all the right intentions, the implementation is sometimes wanting. U-Shin plans to run its adverts in the July 25th editions of the Nikkei and Yomiuri newspapers—in Japanese, not English.

Read on: Even as Japan gently declines, some industries are doing well

Readers' comments

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Anjin-San

I agree with Riph: What U-Shin is attempting is a Brain Transplant operation, so the transplanted brain has a significant risk of being rejected outright by the rest of the body. This is not just about character conflict, but also the gaping culture gap between inside and outside Japan....

skepticji

JAPANESE firms are an insular lot. Executives typically stick with one company for life and bosses are promoted from within.

Is this statement the usual stale false stereotype?
Isn't it applicable to any country?

Japanese firms are hardly inular in one very tangible measurable way ---- theta actively seek and sell in overseas markets. Not very insular!

Most western companies have boards drawn from a very narrow strata of society and from the same old boy network. Very insular!

Anjin-San

Fast Retailing and Rakuten both have their reasons to move their headquarters out of Japan (probably to Singapore), and that is what drives their hasty adoption of English as offical language.
It's all about corporate taxe codes and political intrigue...

joeh12

Though the post by (Banatee) is noteworthy,... having lived and worked in Japan for over 15years, and been privy to more than just corporate Japanism... but also to the mentality of the normal populace. I can honestly state that -while deep-rooted likes and dislikes are taken at face value by westerners who think everything is reflective of "tradition"... it is actually a love for anything "western" including the English language that hypnotizes Japanese about accepting new changes (especially anything western).

One of the most successful business ventures in Japan... are [eikawa] えいかわ which are nothing more than overrated English conversation schools... and I use the term school very loosely. For years now, Japanese have embraced the TOEIC testing system -a Japanese version of the TOEFL to promote management. Promotions in Japan are not inclusive of who is qualified, more experience, nor even respected by peers... rather who appears to sacrifice family/life for the company, and who has been liked by management.

What most outsiders consider successful Japanese management, has only been thriving for a short period of time, but as time progresses and world market leaders transform accordingly... Japan has been reluctant to let go of the Good Old Boy mentality... until now. I do not see it as some sort of embracing of outside influence but rather a tactic of survival in a very uncomfortable race into the next century. Without change, Japan has slowly noticed that antiquated tactics are no longer a great defense for the approach of multinational, international, and global markets around the world.

tripathichirag

Strange !!!

I have been interacting with Japanese companies for more than 4 years

I have developed good understanding on Japanese culture and tradition. This journalist have something in his mind...

1) The need for english speaking people is must for opening up on a global level

2) Hiring foreign english speaking people is another strange information for me ... but time is changing ...

Riph

Banatee is on the mark, beat me to it.

To add to the commentary though, I wonder how people inside U-Shin reacting to the move? Certainly there are going to be a few people in management who feel like they are being cheated out of what they feel are owed after a lifetime of dedication. Not only does the new president need to be competent in global business, he's going to need to be a pro at motivating his teams and getting everyone in line.

Banatee

I've lived in Japan for several years as an exchange student and a civil servant, and I think that this journalist knows a lot more than everyone is giving him/her credit for.

This kind of change is a BIG deal in Japan because Japanese culture is all about maintaining established practices. When you suggest something new, many Japanese people will automatically shut down and say "no thank you, that's not what we've done up until now." Now that the practice of hiring foreign executives in Japanese firms is becoming established, you're going to see a lot more of it. I guarantee it.

Japan desperately needs foreign executives precisely because they aren't constrained by the Japanese culture of basing the future on the past. That strategy hasn't been serving Japan very well for quite some time now.

Sean Notheard

It might be a stretch to hold up the example of U-Shin as a sign of changing times in Japan. It's largest shareholder until earlier this year was RHJ International; formerly Ripplewood Holdings. RHJ unloaded its full stake in U-Shin for less than half of what it paid in 2006.

dmangodapple

i feel its irrelevant wether you're english speaking or not, for me the most imporant thing is that your perform within and deliver within that role.

OldSpencer

"The need for globally-minded bosses is finally being understood in Japanese boardrooms."

Ah, gotta love clueless journalists who think they know everything...

Davidsdeli

T.D. and K.C.,

Not really sure what's your point. Are you suggesting that English speaking-Foreign bosses are the silver bullet to failing Japanese companies? Seriously?

Regarding expatriate assignments, where did you get that idea??? Folks, are you serious? Do your homework or get out of the profession. My Japanese friends who get sent overseas are the brightest in their companies, and view it as a must to climb the corporate ladder. This tends to be more so in the largest and best companies.

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In this blog, our Asia correspondents and our Banyan columnist provide comment and analysis on Asia's political and cultural landscape. The blog takes its name from the Banyan tree, under which Buddha attained enlightenment and Gujarati merchants used to conduct business

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