* Summer 1993 In this issue: Feature Article: Making the Connection Profiles: GlobalNet Insights:High-Tech Alliances: A Short Cut to Stability and Growth Business Tips:Business Tips Culture: CULTURAL KNOWLEDGE HELPS AMERICANS NEGOTIATE SUCCESSFULLY IN JAPAN Americans and Japanese conduct a significant amount of business in English,without the aid of interpreters. Are the Japanese business professionals adequately trained in English to meet the requirements of serious negotiations? Dr. Merry White, Professor of Sociology at Boston University and the author of several books on the Japanese educational system, says no: "While all Japanese receive at least six years of English in secondary school, this education is focused on grammar and syntax. It prepares students for the multiple choice questions on college entrance exams, not for business negotiations with native English speakers." Yet, Americans and Japanese manage to communicate and forge strong business relationships, despite the language barrier. a successful communication strategy relies foremost upon knowledge of the cultural differences in communication practices and styles. Understanding potential pitfalls and learning specific techniques for interacting with Japanese people in English can go a long way toward improving business relationships. "Understanding the culture of the negotiation is almost more important for Americans to understand that there is a range of perfectly valid negotiation strategies." Specifically, White asserts that the fast-paced, sign-on-the-dotted-line style of negotiations is more American than it is "modern." Moreover, this approach often falls flat in Japan, where the key purpose of negotiations is to create long-term relationships of mutual trust. According to Patricia Gercik, Managing Director of the Massachusett Institution of Technology Japan Program, this trust-building process begins long before the first meeting takes place. "American firms must prove their credibility," says Gercik, "and they must do this by researching the company well, learning who's who, and understanding the connections between the two companies. Advance preparation shows a level of commitment that the Japanese expect." During meetings, a slower pace will be more familiar and comfortable for the Japanese, and will also help in overcoming the language barrier. Bob Brownson, Software Alliances Business Manager at Digital Equipment Corporation, relies on a strategy of repetition and restatement of intent. "I never assume that a Japanese audience has clearly understood me until I've repeated my message a couple of times, said it in different terms, and then gotten a restatement of it from them during the course of conversation." Another tactic Brownson recommends: present the same information to various people within the organization and then allow time for them to meet and compare notes. "As soon as uniform, consistent messages start coming back to me," says Brownson, "I know they've understood." Written documents are another essential ingredient of smooth negotiations. Translating key documents into Japanese improves communication immensely, and since virtually all Japanese understand written English better than spoken English, even non-translated materials are helpful. "The more written materials I provide, such as overheads and slides, the better my overall communication," says Brownson. Paul Cramer, a consultant for Conflict Management, Inc., follows up every meeting and phone conversation with a fax, clearly stating his understanding of what took place. Misunderstandings that arise during face-to-face negotiations (most commonly, when the American side mistakes Japanese nods and "yesses" for agreement rather than a show of simple understanding) can often be caught through a brief exchange of faxes. Interpreters can also aid the communication process considerably, but it is also important to know when and how to use them. Since negotiations with Japanese rely on strong interpersonal skills and trust-building, it is often better to handle initial meetings without an interpreter. However, interpreters should be hired for more formal negotiations, and especially when constructing an agreement. To not hire one's own interpreter is invariably to rely on someone from the Japanese side, who will represent that side's interests. Moreover, he will likely be negotiating as well as interpreting, to the detriment of his interpreting performance. Hire your own interpreter and build a relationship with that person in advance, allowing him or her to understand your business and, in particular, your goals for the negotiations. Finally, leave the interpreter at home during dinners and late-night drinking, when much of the necessary trust-building takes place. Language Barriers may indeed present formidable obstacles to international business negotiations. But common sense and an understanding of the Japanese negotiation culture allow American business people to build successful relationships in Japan, without learning Japanese. Japanese Language Services offer on-site Japanese business culture workshops to help Americans be more effective in their dealings with Japan. Call Carl Kay at 1-800-USA-JAPAN for more information. GlobalNet GlobalNet, human resource firm, specializes in recruiting bilingual and bicultural personnel for positions based in Japan or the United State. Bonnie Lappin, the firm's President, offers the following information for companies seeking employees with these skills: The international pool of candidates qualified to assist U.S. firms in the Japan market is very small. As a result, compensation packages for similar skill sets vary enormously, and are often inflated. Many U.S. firms mistake strong bilingual and bicultural skills for an ability to generate business in Japan. This may or may not be the case, and selecting the wrong candidate too represent a U.S. firm in the Japan market can be very costly. Some hiring Guidelines * Conduct a salary survey for comparable candidates to ensure areasonable compensation package. * Tailor your search to find candidates with business developmentskills necessary to expand sales volume in Japan. * Create an extensive interview process taking into account the high level of interpersonal skills required for these positions. For more information, call GlobalNet at 617-229-5830. High Tech Alliances: A Short Cut to Stability and Growth U.S. high tech in the 90's is a vast playing field populated with high-potential and high-risk companies. One way for high tech firms to minimize risk while maintaining their flexibility is through strategic alliances with Japanese firms, which offer maturity, ample internal resources and access to the world's second largest market. George Hara, a partner of Accel Partners and DEFTA Inc. (a $350 million venture capital firm), Director of Borland International Inc, and President of Data Control Ltd. (a major LAN supplier in JApan) knows the high tech industry in both countries. He is also chairman of the ALLIANCE FORUM, an organization that promotes cross border strategic alliances. American companies in high tech industries are, and will continue to be, the most competitive in the world. Unlike traditional companies in mature industries that have had to rely upon governmental laws and resolutions to break into the Japanese market, companies in fields such as software and biotech are penetrating this difficult market on the basis of product quality alone. These American companies wan tot strengthen relations with Japanese firms: according to an article in the Wall Street Journal, 72 percent of U.S. companies interested in international tie-ups are looking to Japanese companies to share everything from development to manufacturing to marketing. Japanese companies want to form alliances with U.S. firms to help them weather the period of uncertainty that major structural changes in the Japanese economy are sure to bring. From the 1950s through the 1980s, the Japanese economy was led by major companies in export industries whose corporate objectives were clear: to improve and apply Western technology and then export volumes of high quality products back to the West. While this process fostered a high level of production technology and manufacturing know-how, it encouraged neither original R&D nor the type of unique venture companies that are currently thriving in the U.S. For these Japanese firms, alliances with foreign venture companies developing original technology may prove to be the most promising model for restructuring in this decade. American high tech companies interested in alliances should target small and mid-sized Japanese companies as well as large ones. While less well-known abroad, these smaller firms offer quick decision-making capabilities and flexibility, making them more compatible with American firms. ACCESSING JAPANESE SCIENTIFIC AND TECHNICAL INFO: Washington-based Japan Information Access Project helps American researchers and executives keep abreast of technical and business developments in Japan. Members enjoy conferences, access to research reports, and an excellent bimonthly newsletter. as a non-profit organization that receives no Japanese or U.S. government money, the Project provides keen analyses of the bilateral trade relationship (tel. 1-202-332-5224). NEW BOOKS Patricia Gercik, Managing Director of the MIT Japan Program, uses literary-style case studies and analysis to shed light on the human dimensions of business relationships between Japanese and Americans in On Track with the Japanese (Kodansha, $1995). If your business trips leave time for sightseeing excursions, consult Gateway to Tokyo (Kodansha, $10.00) by Kinoshita and Palevsky, a handy and thorough guidebook to the city and its environs. CHECKING OUT A JAPANESE FIRM? Information on small and mid-sized Japanese companies, which are increasingly interested in international business (see Insights), is hard to locate. Teikoku Databank's U.S. office, at 212-486-2637, can supply the financial statements of approximately 250,000 Japanese firms and company profiles of nearly 1,000,000. Data on individual firms as well as industry sectors are available. Some of Teikoku's files are translated into English and can be searched on-line via Dialog (1-800-334-2564). The Japanese Business Calendar SUMMER/NATSU As in the U.S., summer is a period of relative calm in the Japanese business world. With July comes Chugen, the first of two annual gift-giving times in Japan. Chugen gifts acknowledge those to whom the giver feels indebted, such as mentors and established customers, and provide an important way to cement business relationships. Every summer, department stores devote entire sections to appropriate chugen gifts. However, since gift-giving is a complicated ritual in Japan, it is always best to ask the advice of a Japanese colleague before taking part. Obon, on August 15, ranks alongside New Year's Day as a major Japanese holiday. People return to their hometowns with their families to visit the graves of deceased relatives (whose spirits, it is said, come home for one day). Once again, travelers experience a tremendous crush on the trains and roadways as everyone attempts to leave Tokyo at the same time. Many people take a week or so of paid leave in the summer, called Kaki-kyuka, for family trips or simply to relax. Vacations, traditionally not an important element of a Japanese worker's lifestyle, are becoming more and more common, especially with the new values of the younger generation. National Holidays: August 15 Obon September 15Respect-for-the-Aged Day September 23 Autumnal Equinox Day The Japanese Business calendar includes many world class trade shows, and Japanese Language services offers the following trade show services: * Producing literature, videos, and slide shows * Arranging booth rental, staffing, and other logistics * Collecting information at shows Contact Coleman Yeaw at 800-USA-JAPAN for more information. Trade Shows July 7-9 SunWorld '93 July 8-10 '93 International Modern Hospital July 14-16 CASE Japan '93 August 24-27 '93 Franchise Chain Show September 16-18 Clinical Laboratory Automation Show September 20-22 Microwave '93 and Microwave USA '93 September 29-Oct.1 Software Show '93 _________________________________________________________________ JAPAN INSIDERCopyright 1993 Japanese Language Services, Inc. All rights reserved.PUBLISHER: Carl Kay EDITOR: Laura Silverman Japan InsiderJapanese Language Services, Inc.186 Lincoln Street, Boston, MA 02111-2403 Phone: 617-338-2211 Toll-free: 800-USA-JAPAN Fax: 617-338-4611 _________________________________________________________________ E-mail: insider@japanese.com World Wide Web: http://www.japanese.com