Doing Business in Japan

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  • Topic: Japan, Economy of Japan, Japanese language
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  • Published : May 16, 2014
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Rochelle Jones
BC – 607: Leading from a Global Perspective
Assignment 2.1
Spring, 2014
1) A large Japanese firm makes important decision by a so-called “nemawashi” consulting system which requires all internal stakeholders to review and sign the final decision. Research the concept online and compare the advantages and disadvantages of this decision making versus the vertical U.S. system. Describe specific situations when “nemawashi” could be advantageous and disadvantageous. The culture of the Japanese is to live in harmony with nature and others and they do this by avoiding debates and clashing positions by using a decision making system called Nemawashi. They value interpersonal connectedness and consensus which is the exact opposite of how Americans think and respond. This idea was developed in 1950 when American statistics professor, W. Edwards Deming, trained Japanese leadership staff in Science and Engineering on quality control techniques. David O’Gorman (2012) wrote, The techniques Deming introduced were very compatible with the cultural value of harmony. For example, Deming had 14 key principles for quality improvement. One principle is to “Break down the barriers between departments.” Deming’s perspective on teamwork, and his other teachings on quality improvement, fit perfectly with Japan’s cultural values of harmony and consensus. Nemawashi gets its meaning from a horticulture terminology meaning “wrapping around the roots.” When transplanting a tree from one place to another, preparing the root ball by wrapping it with fabric material and acclimatizing it to its new location before transplanting would make that tree grow healthier and stronger in its new environment. (Sakai, 2012) In practice, it means that the groundwork for a new proposal must be carefully prepared in advance if it is expected to take root, survive and prosper. (O’Gorman, 2012). Japanese managers are significantly more relationship-oriented and hierarchical than their U.S. counterparts, preferring consensus building, collectivist decision making, and risk avoidance. (FitzGerald, 2014) By informally communicating ideas to stakeholders, any issues planned for discussion in the larger meeting that might prove to be controversial are hashed out ahead of time so that they don’t create embarrassing snags. Any new ideas or proposals that are going to be presented can be floated in the pre-meeting, in order to avoid any surprises during the main meeting. (Kopp, 2010) To avoid conflict and saving face, many of the discussions of an idea are done informally with all stakeholders prior to the actual formal meeting. There are advantages and disadvantages of this decision making style. The advantages of Nemawashi are: Nemawashi is a more disciplined business practice

Nemawashi eliminates the element of surprise
Nemawashi eliminates the likelihood of “whoever screams the loudest” getting their way Nemawashi eliminates ego and aligns interests to a common goal, focusing on the problem at hand with more input across the team or organization (Gordy, 2013). Consensus-building

The disadvantages of Nemawashi are:
It is time consuming
Is not well suited to generating the innovated products and services that Japan needs to compete globally in the future. It suppresses innovative ideas. The nemawashi-ringi process can allow good ideas to wither and die. (O’Gorman, 2012). People are worried that decisions are sometimes made behind the scenes, instead of out in the open. It is therefore seen as an undemocratic process. (Abe, 2014). Those who hold a minority view do not express it to preserve harmony. Furthermore, decisions are flexible and open to change. As a result, decisions are vague, rarely written down, allowing various parties to implement the decision differently. (Anderson, 2009). An example where Nemawashi can best be implemented occurs when a decision does not have to be reached immediately. Japanese use it effectively...
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