Brexit and Misunderstanding of Japanese Business Values

Posted on 18 February 2016 in Cultural Awareness, Japanese Corporate Culture, Market Insight, News, Uncategorized -

David Cameron recently urged non-British leaders of major companies in the UK to support his opposition to a Brexit by implying they would take their business elsewhere should the UK leave the EU. However, both Toyota subsequently said they would not reconsider their investment should that happen. This was reported in a recent article in the FT as a ‘blow’ to his campaign and incorrectly used as an implication of their support of a Brexit.
Apparently Mr Cameron wasn’t listening at the Hitachi Rail Opening Ceremony in Newton Aycliffe last year when Hitachi CEO Hiroaki Nakanishi announced that they were there to stay and both him and the Japanese Ambassador spoke of historical ties between Japan and UK concerning train manufacturing. (See my blog about this event) This sense of commitment is one particular aspect of doing business with the Japanese that comes from a corporate culture that values long-term relationships, obligations and loyalty over quick profits. Resulting disparities between these values and those of a globalising world have forced change in many areas for Japan, some of which were inevitable such as the shedding of less profitable products of companies and an openness to competition as opposed to supplier/brand loyalty. Such co-operative values are not particularly valued nor are they very effective in western societies where short-term profits and logic prevail. However, these values still remain very much part of Japanese business culture and generally mean that a contract with a Japanese firm, however painstakingly long and arduous it is to forge, is, by western terms, something you can rely upon unless you do something unforgivable.
I am also not suggesting that the Japanese businesses in the UK will stubbornly stay here regardless in the case of a Brexit if it means they will lose profitability or access to vital supply chains. They have shown in the past they will pull out when things go irreparably wrong. Let’s hope it does not come to that. However, it is naïve to expect Japanese bosses of major Japanese companies that have been in the UK for many years, have historical and emotional connections to them and have built communities around them or even more so one that has committed to basing their global HQ for train manufacturing here to publicly deny the values which underpinned that investment in the first place, even if it would further an aim that most Japanese businesses in the UK support- the UK staying in the EU. You only have to consider the Japanese values of honne (real feelings) versus tatamae (public feelings) and face-saving alongside the above mentioned sense of obligation & commitment to understand why this would not be a comfortable situation.
Japan is one of the major inward investors in the UK and has shown immense commitment to R &D, training and education, job creation and community involvement here. I often feel that this long-termism is not always recognised nor appreciated and in this case has been used for political posturing.

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