The recent set of guidelines issued by the Japanese Government to the British Government and the EU regarding Brexit apparently took Downing Street by surprise but were inevitable given that Brexit has pushed all the Japanese cultural buttons.
Generally, the Japanese avoid instability, uncertainty and unpredictability. Given that group harmony, inflexible hierarchies and love of consensus are all still powerful forces within Japanese business, they find people from more individualistic cultures scarily unpredictable in their decision making and individuality. Admittedly, they had the Brits pegged as a safer bet in this respect and were lured into a false sense of security about the outcome of the vote from a very London-centric view without foreseeing the anarchic side to the British public or the discontent simmering away in the regions. They also invested heavily into the UK on a basis of trust in the commitments made by the previous government and the potential withdrawal of these benefits that they saw as ‘firm’ commitments has been interpreted as a breach of trust rather than a result of democracy.
Trust and Obligations
This trust within long-term relationships is so integral to the business environment in Japan and relationships are carefully formed so that everyone knows what to expect from them. Even today, many Japanese living overseas still deal with Japanese companies for services-it’s just easier and everyone knows the obligations involved, some of which seem unrealistic and unnecessary to non-Japanese. They include: avoiding loss of face, never upsetting the group harmony, keeping everyone informed so there are no nasty surprises and always show respect and loyalty to your boss/employer or the group as they are the ones who ultimately look after you. Ideally it’s better if you do this without anyone having to actually directly tell you this but a dressing down does occasionally happen and the government are not shy from dictating what businesses should do- the state holds immense authority and control over the private sector in Japan.
So in a sense, it’s totally natural that the Japanese reacted the way they did. The obligations from the long term-investments the Japanese made into job creation, training, education in the UK are in their eyes not being reciprocated. The feedback, detail & reassurance needed by the Japanese to ensure there are no nasty surprises/loss of face, to achieve harmony and to enable long-term planning are not currently forthcoming from the British Government. For obvious reasons really-no-one actually knows what is happening and they are starting from scratch with this. We may be used to some level of unpredictability in our decision making processes and turn-around once decisions have been made but the consensual decision-making Japanese are not. The rhetoric coming from the UK may be one of stoicism-let’s get on with it, stop complaining and see it as a positive opportunity for change. However, this is really unsettling for the Japanese. The current uncertainty surrounding Hinckley Point will just exacerbate this and market us as being unreliable and liable to renege on our long-term commitments.
So how do we go forward?
The British Government needs to be better advised regarding Japan-they already made themselves look unfavourable to the Japanese when not only a week after attending the opening ceremony of the Hitachi Rail Factory in the NE and lauding a massive investment from Nissan in their Sunderland factory in September last year, George Osbourne was straight off to China urging them to bid for HS2 contracts before the hybrid bill had been passed. Although the vote for Brexit was never really about rejecting Japanese investment, there is great sense of betrayal from the Japanese companies who invested in the areas of the UK where the Brexit vote was high. We will need to work very hard to re-build the trust and show the Japanese we appreciate the investment and the obligations that go alongside it. The Japanese side will also have to realise we can’t meet all these obligations and don’t always react well to being told what to do-that caused enough problems with the Brexit vote!