Re-building Trust in Japan UK Business After Brexit

Posted on 28 June 2016 in Cultural Awareness, News -
Japan UK

Cultural Differences

Disliking change more than most, the Japanese are reeling from a decision making process that differs culturally from their own. Characteristics of the British summed up by Der Spiegel as an “inner independence in addition to myriad anti-authoritarian defiant tendencies” stand in sharp contrast to the Japanese preference for hierarchy, conformism and putting your individual needs behind that of the group/company. Decision making in Japan is purposely consensual to get buy in from everyone so that unpredictable decisions are almost never made.

The traditional paternalistic role of a company In Japan where loyalty and trust work both ways (full time workers can rely on the company to look after them and the company can, to a certain extent, be allowed to tell them what to do) will explain why those Japanese companies who have invested heavily in areas such as the NE and who openly expressed their preference to stay in the EU, were hit hard by the high percentage of Brexit voters in these areas.

We now risk being seen as untrustworthy-not a good thing since trust is one of the basic cornerstones of doing business with Japan.

Building a Culture of Trust

However, the future of Japan UK business can be bright if we can re-build trust and mutual understanding. There is a very positive attitude towards doing business with Japan in the UK. I have been working with Tokio Marine HCC, who have been outstanding in their positive attitude towards working with the Japanese and building up this culture of trust. Many of the larger Japanese investors initially chose the UK because of access to the single European market (no-one knows if that will survive) but also because of many shared values and careful relationship building. Some of these companies have formed large Japanese communities in the UK creating a culture of trust through investment in training, local employment, educational and cultural links.

Business Opportunities

The vote for Brexit may have been a vote for many things but it should never become a vote against UK Japan business.

Although Brexit may have been a harsh lesson for the Japanese in the uncertainties of globalisation and shake their trust in the British market, I can’t see all their companies immediately jumping ship (their customary risk-averse nature may well prevent this especially when the future of the EU is so uncertain) nor them stopping doing business with British companies. Although it can take many years of relationship building to create successful business with Japan, long-termism is its reward. The CEO of Hitachi declared at Hitachi Rail’s opening ceremony in Newton Aycliffe that they were there to stay. Although Japan has been criticised for protecting less than lucrative (zombie) companies within their long-term networks, this non western business mentality may well be something we are thankful for in the short-term until that trust can be re-built and the future is more certain.

Japan is a long term investor in and trade partner with the UK and should remain one of our key business partners given their current globalisation imperative and a need for us to trade with other countries outside of the EU. The BoJ has been asked to free up cash for their companies in the UK-let’s hope our government can reciprocate by negotiating beneficial trade agreements and financial incentives.The vote for Brexit may have been a vote for many things but it should never become a vote against UK Japan business.

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