Success in Japan

“What can I do to maximize the success of my office in Japan?”

The following should provide you with some basic recommendations and ideas on doing business in Japan and should prevent you from making the same mistakes others have made before you.


Don't fall into the trap of hiring someone just because they speak and write English. While strong English skills are indeed a big plus at the office of a foreign company in Japan, employers should be sure that the background, skills and contacts of anyone they hire mesh well with the company's overall objectives.

Domain Name in Japan

If you want to have your Japanese web site run by your subsidiary in Japan, make arrangements as soon as possible to register your domain name there. Some companies prefer to control all worldwide sites from headquarters, but the tools for doing so and the translation costs can be quite high. Please note that domains are regulated and limited to one per company. No such limitation applies to .jp domains.

Seal of Approval

Many foreigners are unaware of the degree to which Japanese business culture still relies on traditional ways of doing business such as the ‘hanko’ requirement (in place of a signature, most official documents must be concluded with a personalized seal). A person with bad intentions and possession of a company's seal can wreak havoc by committing the company contractually simply by affixing the corporate seal. Therefore companies must only allow access to their corporate seal to trusted and authorized individuals or have a trusted intermediary control the corporate seals.

Insider and Outsider (uchi and soto)

"Imagine two scenarios. In the first, representatives from an American company are negotiating with a party from a Japanese company. The American side proposes a new idea only to be met with an uncomfortable silence. They press for a response, but get none. Only later, when the Japanese side has had a chance to confer in private and telephone other members of the company, do they receive an answer. By this time, the Americans are frustrated by the slow pace of their Japanese counterparts.

In scenario two, a U.S.-based global corporation issues a new worldwide personnel policy. The Japanese subsidiary does not complain, but neither does it act to implement the policy. Headquarters feels that the Japanese side is two-faced and disloyal. They cannot understand why the subsidiary doesn't act more like part of the company.

What is really happening in these two scenarios? In a word (or two): uchi-soto.

A Japanese person's sense of identity stems in large part from his or her affiliations with groups called uchi (“inside”). Anyone not in a particular uchi group is considered soto, or “outside”. Many interactions in Japan are influenced by the uchi-soto dynamic of the relationship.

The broadest uchi tie is that of being Japanese; non-Japanese are called gaijin, which literally means “outside person”. Other uchi affiliations include family, university class, company, and work group.

Business dealings with soto people (whether foreigners or Japanese from another company) are generally polite, but always more ritualized than those with insiders. Information is not shared as freely, and a unified front is presented to the outside regardless of internal disagreements. The Japanese in the first scenario above cannot give a response to a new proposal until their uchi digests the idea and formulates its position. In general, the Japanese will not be ready to engage in give-and-take exploration of new points within a single formal negotiating session. For maximum results, people from western societies should allow time for the uchi to reach a consensus, or should explore less direct ways to introduce new ideas into the negotiation.

The corporation in the second scenario must accept a key fact: although the subsidiary will feel an uchi tie as part of the parent's company, by all other yardsticks the foreigners at headquarters are soto. To strengthen the uchi aspect of the connection, the foreign side should consider investing greater effort to build close relations. Good relations will engender a sense of mutual dependence, which will manifest itself on the Japanese side in the responsiveness that the foreigners seek.

For more information on Japanese culture please visit the personal website of J-Seed Director Carl Kay. He has also published a book about Japan's service sector at which won acclaim as a source of advice for companies in the service industries of Japan. Anyone, interested in entering the Japanese market, whether in the service business or as a manufacturer, is well advised to also check out the resources made available by the American Chamber of Commerce in Japan at