Japans Cultural Analysis through Hofstedes Dimensions - Term Paper Example

 Japan’s Cultural Analysis through Hofstede’s Dimensions Introduction Japan was attacked with a nuclear bomb in 1945 but the country showed to the world; growth which was unimagined, unbelievable and unchallenged. Japan’s environment accounts for this progress, coupled with its cultural landscape. In this report, PEST and cultural analysis of Japan is undertaken through Hofstede Dimensions and is compared with that of Canada’s. Japan’s Cultural Analysis through Hofstede’s Dimensions The cultural picture of Japan as depicted by Figure 1 constitutes components given as below: Power distance: power distance determines the level of expectance and acceptance of power distribution by people in a society. Score of 54 indicates that Japanese follow the hierarchical status in professional life and are commanded by authority and position. However, Japanese are still less hierarchical than their Asian counterparts and believe in joint decision making to some extent (Geert Hofstede n.d). Individualism/collectivism: this dimension measures the extent of “I” or “We” prevailing in the society. In Japan, collectivism is at a high which characterizes harmony, coordination, group efforts, consensus and mutual sharing. Japanese are, however, less collectivist than Chinese. Masculinity/femininity: this dimension tells about quality vs. quantity of life preferred by people in a society. Japan depicts a very high score of 95 which means Japanese are highly masculine- they prefer success, ambitions, competition and excellence over coordination, consensus, care and overall quality of life (Geert Hofstede n.d). Uncertainty avoidance: future is unknown. Uncertainty avoidance measures whether people in a society try to bind it or let it happen the way it is supposed to. Japan is one of the nations having the highest score of uncertainty avoidance. Japanese tend to control the future through planning, precautions and regulations and are always wary of the unknown. They study and analyze risk factors in great detail before commencing upon anything. Long-term/short-term orientation: it is a time based point-of-view towards the achievement of goals and results. Japanese score 80 here which means they are long-term oriented and invest heavily in real-estate and properties to secure their future. They believe in virtues, steadiness of results over time and generations serving the society at large. Figure 1 highlights the differences in the cultures of Canada and Japan which go as below: Canada, unlike Japan is a country with lower PDI score which means inequalities in power distribution are perceived lesser than that of Japan’s. People respect the status and authority and accept the distribution (Geert Hofstede n.d). Canada is a more individualist nation than Japan, owing to its high IDV score, which means it features greater materialism, self-interest and self-reliance. On comparison, Canada is a feminist society where care, affection and quality of life are given more importance than Japanese attributes of success, achievement and aspirations. Canadians are relaxed when ambiguities and uncertainties are talked of. They suit their laws and regulations with the situations and do not panic; unlike Japanese who always carry a detailed list of rules and risks before doing anything. Canadians are short-term oriented and do not believe in investing or saving for future. They live in the present and want to get immediate return which is totally contrasted to the long-term orientation of Japanese. Japan’s PEST Analysis The PEST (political, economic, social and technological) analysis of Japan throws considerable light on situations which help decipher favorable possibilities of doing business in the country. Political: earlier, Japan was a feudal system devoid of democracy. The Emperor took decisions but World War II shifted Emperor’s power in the hands of people. Due to Western influence, legislation in Japan is developed and written by the bureaucratic set-up and now constitutes 47 local jurisdictions (Nagel 2010, p. 4). Business in Japan would be facilitated if local politics and governor’s rules are deeply looked into. Secondly, international trade and business in Japan is still guided by the Ministry and hence, companies doing business in Japan have to understand the level of control and interference of Japanese Government. Economic: after the US and China, Japan is the world’s third largest economy in terms of economic growth. The country has also highlighted improvements in fiscal freedom, corruption-less government management and monetary freedom which signals sound economic benefits for multinationals (The Heritage Foundation 2013). However, Japan’s economic growth is frequently marred by natural disasters like earthquakes and tsunamis. Such calamities often lead to deficit in budget, low consumption rates, deflation, political instability and high government expenditure which keeps the country on a slow growth rate path. Also, political interference is high in the financial sector. Japan’s cultural emphasis on seniority and traditional work practices also limits labor freedom which might be a matter of concern for companies doing business in Japan. Free trade agreements are still in their nascent stages in Japan. Social: socially, Japan is a nation which features ‘saving face’, long-term relationships, respect for position and seniority in workplace, importance to hierarchy and the ability to stay calm and be patient no matter how much frustrated a person is. One of the key ingredients in doing business successfully in Japan is focus on group work and team orientation. Not as concepts, these terms are considered the fundamentals of professionalism in Japan. Japanese also take a lot of time analyzing every single detail of information and then arrive at a decision. Multinationals who wish to do business in Japan have to be careful about this time gap and should not hurry or pressurize Japanese to take immediate decisions. Technological: Japan, despite slow growth and the fury of natural disasters, is world’s technological hub. It is the place for technological inventions, discoveries and high-end technical up-gradations. Most of the successful business houses and big companies in Japan operate in products driven by technology like the video game industry. Doing Business in Japan Owing to the facilities available for video-game industry in Japan, it is chosen as an appropriate business to be commenced in Japan. Factors working in favor of this decision are: Political: since the video-game industry is a legendary one in Japan and contributes a lot in earning foreign revenue, the political regime in Japan is constantly easing its laws to make them favorable for this industry. Earlier dominated by big business houses like Nintendo, multinationals and new entrants have started making their mark in video-game industry in Japan. Many new policies regarding age restrictions of media and expansion of this industry favor further foray in this segment of Japanese business market. Economic: gaming is highly popular and deeply penetrated in Japanese market. It brings a lot of domestic and foreign currency to the companies operating in this business. However, due to earthquakes and tsunamis, frequent expenditure shortages on gaming products are felt due to an increase in expenditure on items like food, clothing and necessary supplies. Despite this temporary setback, gaming is an evergreen market in Japan that will always flourish. Social: not only entry but expansion in gaming industry is favored in Japan due to this being a favorite pastime and a hobby of Japanese. People of all age play games and passing of favorable rules regarding the expansion of this industry have increased the possibilities of expansion. However, one should not underestimate competition from giants like Sony and Nintendo who already enjoy considerable share in this segment. Technological: with increased number of options and substitute products with advanced technology, target audience would increase, offering better prospects for new entrants. Even with imitation, one can sell its products in Japan and overseas just under the technological brand of Japan. Setting up a video-game business in Japan can be undertaken with the help of a local business. Since government intervention is still high in free trade, setting up a subsidiary will not only cause political hiccups, but also result in high start-up costs. Tying hands with a local Japanese business first would help getting a readymade market to sell products, facilities and know-how of the entire process. It will also help learn the Japanese traditions and customs which are a must to do business in Japan. Conclusion Most of the dimensions of Japanese business environment favor setting up a video-game business in Japan. However, this market is fast reaching its saturation point and hence, after attaining certain level of technological know-how, resource competency, sufficient customer base and product penetration in different segments; one should head towards capturing new markets which are still naïve in the adoption and acceptance of gaming products. Establishing the base in Japan will help get the fundamentals correct and the brand name of Japan in technology which is respected across the globe. References Geert Hofstede (n.d). What about Japan? Retrieved [Accessed March 17, 2013] Nagel, S. (2010). Basic Guideline for a German Company to do Business with Japanese Companies. Germany: GRIN. The Heritage Foundation (2013). Japan. Retrieved < http://www.heritage.org/index/country/japan> [Accessed March 17, 2013] Read More