Compare and contrast business systems in Japan and China. Answer with reference to relevant theories and use comparative country and/or corporate examples.
The comparison and contrast of the business system between Japan and China
In Japan much of its arts, languages, religion and culture are imported from China hence there are some similarity in both countries’ business system but over the centuries, Japan was able to convert this commonalities into differences which is uniquely theirs and these differences have a huge impact on the business system of China and Japan.
Overview of Japan and China economic growth
While the economic growth of many other countries may be at a standstill, China’s economic growth is expanding at a great pace and is considered one of the world’s fastest growing economies. One of the main factors that fuel China’s fast economic growth was the release of Hong Kong to China from Great Britain in 1997. The second factor was Deng Xiao Ping’s “Open Door Policy” which is the opening of free trade with other countries in which it was originally a closed trade country and greatly reform China in the area of agriculture, industry, science and technology changing the country into a modern industrial nation. The third factor was population control with its one child policy which help improved the method toward feeding its population.
The fast economic growth of Japan started after World War II and it catapult Japan into one of the world’s few most economically advance country. Currently Japan is considered one of the top economic powers after USA, China and the European Union. Japan is a very small country; its population density is very solid and majority of the land is not suitable for agriculture as it is mountainous and there are little minerals which is need for agriculture development hence Japan had to rely on creativity and innovation to produce good and export it to develop its economy, domestic investment in industry and infrastructure is also a key factor behind its economy growth.
In Japan, silence is generally preferred to expressiveness as people are appreciated by their sweat and hard work rather than words because word tend to be felt as redundant while in China, expressiveness is usually considered an important capability as Chinese people are more direct in verbal expression than the Japanese people, for example if the Chinese employees felt they are not treated fairly they will directly approach the supervisor or higher management for an explanation while the Japanese employees generally tends to keep silent and self-restrained which is seen as a sign of inability for the Chinese people, and salary information are often publicly exchange between Chinese employees but it is rarely seen in Japan. Employment
Japanese organizations prefer to recruit fresh graduates and keep them for life, education, on the job training and internal promotion will be provided.
In Japan, the personality trait of loyalty and harmonious membership to a group is highly valued thus transferees are usually rejected; they will only accept the new which refer to the fresh graduates and the old who have more experience.
In China, Organizations generally do not guarantee life-long employment and it welcomes skilled transferees from other organization. Chinese people are often unconsciously ranked by their competencies and most of the time individual’s efficiency comes before organizational harmony hence if a better job opportunity arises, individuals will not hesitate to change job.
Both Japan and China have the same core value which is ‘‘the interests of the group prevail over the interests of the individual’’ (Hofstede, 1991, p. 50), but its culture are very distinct and the Japanese people feels a strong sense of identification with the formal organization than the Chinese people
Strategy implications of the business cultural differences
For foreign organization that develop their businesses in Japan and China, because of the distinct nature of its business cultural differences between both country, the strategy implications is important
Firstly is different communication strategies is needed in Japan and China, since Japanese doesn’t tend to talk much and being self-restraint, careful and detailed confirmation is needed to understand the intent of the context while in China, a message can be easily understood but may be interpreted wrongly without careful confirmation, for example they might say “I didn’t mean that way although i did said that way” hence interpreting the context is a big challenge.
Secondly, for foreign organization doing business in Japan and China, an appropriate set of human management philosophy needs to be followed for specific business culture. In Japan, its performance is evaluated on the basis of the group hence managing Japanese people is a matter of managing groups, while in China, performance evaluation is based on individuals hence managing Chinese employee requires a careful focus on individual.
Thirdly, a different kind of management control is required in Japan and China due to the differences in its business culture. In China, the Chinese employees are more used to competing individually rather than as a group hence its management control focuses more towards result based and empowerment, while in Japan, its management control focuses more toward group centred and process oriented control as Japanese culture is more tacit and place an heavy emphasis on group harmony.
Consensus vs. Command
To compare and contrast the business systems between Japan and China, it is more advisable to compare and contrast with the western organization first. In Japanese organization there is a hierarchy of authority, just as there is in a western organization and untimely profit is the objective. Both Japanese and western have a hierarchy of authority but it is structured in a totally different way. In western organization, participative management is encouraged but most of the time decisions are communicated in command mode regardless of whatever management method is being used. In a Japanese organization you can find consensuses are spread throughout its corporate system from top management all the way down to the bottom, the Japanese organization’s CEO, Vice president, Division head, supervisor or executive will always avoid the position where they have to take command which is quite the opposite compare to its western counterpart. The authority of the management leader is submerged in the group so much that it is difficult to tell who the leader is. In order for an agenda to be approve it has to be extensively discussed and staffed, should it result in failure individual responsibility and the shame that comes with it are avoided as it was approved by the group and not by individuals.
Due to its absence of command, organization is often facing overstaffing in sections, individual productivity is low and overtime is frequently abused. In a Chinese organization, the situation is different as its management style is bureaucratically top heavy, compared to Japan where it is difficult to identify the leader in a Chinese corporate, the leader is very visible and can be easily identified. Its management process which includes hiring and promotion is very often depended heavily on three factors which is “Connections”, “Mutual Trust” and “Under the table dealings “which often may lead to corrupt business practices. It is difficult for a foreign corporate to deal with Chinese organization because of its strict authority derived from political and philosophical ideology that is being imposed. For Japanese organization, it is quite similar to its Chinese counterpart but it is more flexible and varies as condition changes because ultimately its objective is corporate profit Sentimentality vs. Pragmatism
Sentimentality refers to the feeling or an emotional response to a situation, while Pragmatism refers to a character or conduct that emphasizes practicality.
The Chinese people are considered pragmatic, they believe that without wealth, one is not respected, with wealth it brings possessions, security, status and influence hence the Chinese are not shy or apologetic about seeking it and they consider the acquisition of wealth and effort to acquire a money-oriented status is of priority and encouraged. Most of the time issues are being resolved based on wealth potential of the parties involved, for example if a foreign company wishes to do business with a Chinese corporate, they will assessed the company by its wealth before making a decision.
The Japanese on the other hand are considered to be more sentimental, they believe everything is interconnected especially when it comes to relationship and connection between people. It is because of this sentimental, the path in reaching a resolution to issues is lighten even thought it may not affect the result but it can open up other opportunities. Japanese sentimentally is not only expressed art form like haiku and waka which is a very short form of Japanese poetry, flower arrangement and tea ceremony.
With the Japanese, their culture is more contextual because they emphasize more on silence and tacit understanding. Sentimentality plays an important factor in shaping relationships, both business and personal. Indirectness in communication and is generally cconsensus. Most of the time group harmony comes before individual.
With the Chinese, their culture is more pragmatic because issues are mostly resolved on the basis of wealth-acquisition and the dynamics of “Connections”, “Mutual Trust” and “Under the table dealings” which may often lead to corrupt business practices. Its business system is more of a command style as its management is bureaucratically top heavy. Most of the time individual’s efficiency comes before organizational harmony
This article has addressed some of the differences between the Japanese and the Chinese, the contrast was also further reinforcing with the western point of view.
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