Negotiating With Japan (David Boling Commentary)

by David Boling  on Monday, Jul. 18, 2005 12:00 am  

What do Wal-Mart, Tyson, Denso and Hino have in common? The answer: Arkansas and Japan.

Wal-Mart has entered the Japanese market through a tie-up with the Japanese department store Seiyu. Japan is an important export market for Tyson. Hino Motors is building a plant in Marion and Denso will open a plant in Osceola — both plants will produce auto parts.

Increased contacts between Japan and Arkansas means that it is more likely that Arkansas government and business leaders will be negotiating important deals with Japanese firms. One learns a lot about Japanese culture in the crucible of a high-stakes negotiation. Here are three expectations one should have when looking at a Japanese counterpart across the table:

• Expect it to take time. I helped negotiate an agreement signed between the U.S. and Japanese governments in October 1999. It took two intense years to formally negotiate the agreement and about two years of persistent informal negotiations before that. By contrast, we negotiated a very similar agreement with another country in less than one day. Why does the Japanese decision-making process take so much time? There are two reasons.

First, Japan is a big hierarchy. It may be useful to imagine negotiating with a Catholic priest or military officer, when negotiating with Japanese. America does not have much hierarchy, but the Catholic Church and U.S. military are useful reference points. They remind you that your Japanese counterpart exists in a structured, often large organizational hierarchy and to get approval of the proposal will require the sign-off of many people above him.

Second, the Japanese value consensus. Japanese like their rice "sticky" unlike other parts of Asia where rice is preferred to be non-sticky or fluffy. In the same way, Japanese relationships are very "sticky" and require careful attention. This fact means that to reach a decision, a number of people in the Japanese organization (both up and down the chain of command) will have to be consulted. Don't expect that there will be a vote taken to decide the course of action, with the majority dictating the outcome. Great effort will be made to accommodate all views — and it will take a great deal of time.

• Expect many detailed questions. I have been both deeply impressed and driven near insanity at the detail and number of questions Japanese have asked me in negotiations. They often like to write them all down and deliver them to you — like a homework list. I vividly remember getting a list of over 20 questions, with sub-questions also. Why do they do this? Japanese value analysis of every angle and possible risk of a deal. I think they put important questions in writing to ensure that there is no confusion with their spoken English, too. And because they anticipate being asked many questions by their bosses, they like to have answers from the opposing side already in the can.

• Expect pin-point precision. Recently, there was a rare train crash in Japan. The likely reason? The driver had fallen a couple of minutes behind schedule at his earlier stop and drove too fast trying to catch up. The entire time I lived in Japan — nearly four years total — I can't recall a train being late by a minute. Japan is a precision society in many ways — that is one reason it is a leader in automobile and electronics production. This same precision is applied in negotiations.

Americans value precision but appreciate having a firm grasp of the big picture. The Japanese orientation toward precision and the American tendency to look at the big picture can lead to confusion at the negotiating table. The Japanese will be rustling around in the tall weeds while the American is in the clouds, with both sides puzzled by the other's peculiar behavior.

Getting to "yes" with a Japanese counterpart takes patience and persistence. Aligning one's expectations will increase the likelihood of a successful negotiation and reduce the chances that the negotiation will falter because of a misunderstanding.

(David Boling is a lawyer with Mitchell Williams Selig Gates & Woodyard of Little Rock He is a former lawyer with the U.S. Department of Justice and speaks and reads Japanese. E-mail him at dboling@mwsgw.com.)

Summary: Getting to "yes" with a Japanese counterpart takes time and attention to details.

 

 

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