National University of Ireland, Dublin

Bachelor of Science (Finance & HR)

Intake 46
Group: (B)

Module: BMGT2002S: Cross Cultural Management

Submitted by:
Ng Yi Yang, Joey (14208674)
Lim Cheng Chye (14207631)
Lim Si Hui (14207630)
Ili Munirah Binte Mohd Ibrahim (14209617)
Chang Pei Hsuan (14209492)
Novel Lim Yu Ting (14209629)

Lecturer: Dr. Brona Russell

Submission Date: 03 July 2015

Word Count: 2971Words (Excluding Cover Page, References)

BMGT2002S: Cross Cultural

Management
Group B

Done by:
Ng Yi Yang, Joey
Joey.ngyy@gmail.com

Lim Cheng Chye

leonforever21@hotmail.com

Lim Si Hui
siihuii@hotmail.com

Chang Pei Hsuan

pauline_cpx@hotmail.com

Ili Munirah Binte Mohd Ibrahim

ilimunirah.i@gmail.com

Novel Lim Yu Ting

novelli@hotmail.com

Contents

1.1 Japan: System of Harmony?

For years, the question to understand how Japan was able to overcome overwhelming odds
to become one of the worlds largest economic powers had been a fascinating topic for the
global population. Following a defeat in the Second World War that destroyed much of its
economic infrastructure, the Japanese are still able to rise like a phoenix from its ashes to
become a model of modernity and success. Much of the contributing success had been
attributed to the Japanese cultural morals and values.
Yet, a period of governance mismanagement by Ex-Prime Minster Hashimoto had resulted
in a great recession in Japan in the 90s. The Japanese fairy-tale was rudely stopped
overnight; measures to kick start the economy failed and the Asian Financial Crisis of 97
was a double whammy for the Japanese population.
The unique social cohesion that enabled Japan to develop and progress at the start is also
showing negative signs of strains; elements of individualism are developing due to changing
assumptions about job and career security, a deviation from its collective society. The
countrys culture of hard work, though legendary, is facing increasingly pressure from the
countrys aging and declining population.
This report will now present a penetrating analysis of the morals and values that help shaped
the Japanese business personality, taking into account past, current and future trends.

2.1 The Japanese Traditional Core Values

2.1.1 Japanese Wa Peace & Harmony
One of the most influential cultural aspects of the Japanese is their obsession with reference
groups. In order to better understand the Japanese strong sentimental attachments with
groups, there is a need to explore the Japanese traditional value of Wa, which is said to
play an influential part on groupism.
The essence of Japanese style management is based on Wa, which can be loosely
translated into peace & harmony. With the concept of Wa being repeatedly designated
throughout Japans history as the ideal which all Japanese should strive for, it resulted in the
majority being strongly influenced by the concepts of instinctive unselfishness and
harmonious behavior.
Wa cultivates the following two aspects that forms the cornerstone of the Japanese cultural
DNA:
1) The creation and maintenance of peaceful unity & conformity within a social group
2) A commitment to cohesive community over personal interests
Social Scientists have since characterized Wa as a set of culturally specific social norms;
standards of behavior that the Japanese are expected to conform to and are strictly enforced
through tenacious social pressure.

Picture: Interesting Facts about Wa

2.1.2 Tate Shakai The Japanese Vertical Society

Another important cultural concept underpinning Japanese management is a vertical
structural tendency. Human relations in Japan are based on vertical or superior-subordinate
relationships; Professor Chie Nakane of the Tokyo University stated that the Japaneses
superior-subordinate vertical structure, which is established around an ego-centered ranking,
as the primary basis for social order in Japan. As such, it promotes a strong emphasis on an
authoritarian control and obedience culture, which gives rise to a series of highly regulated
patterns of interpersonal relationships.
Implications of Tate Shakai:
1) Ranking in a superior-subordinate structure
2) Tendency for the Japanese to identify & form themselves into groups on the basis of
proximity and activity

2.1.3 Other Core Japanese Values

Although Wa has a significant influence on the two main characteristics of the Japanese
society of harmonious groups and vertical relations, other deeply rooted cultural values also
played a part in generating such specific Japanese rules of behaviour. The recognition of
these desirable interrelated values will be essential in understanding why the Japanese have
a strong sense of attachment to groups and are willing to accept a mutually binding vertical
relationship within the group.

Table: Information on Other Japanese Values

3.1 Cultural Collision!

The core values of the Japanese culture have no doubts provided far-reaching implications
for the practices of management in contemporary Japan. In order to better understand the
Japanese style of business management, the Hofstedes Five Dimensions model will be
used to highlight distinctive features in the Japanese culture.
According to Jackson and Tomioka (2004), the Hofstedes analysis is comparative; in order
to better understand the Japanese management culture, it is vital to analyse it in comparison
with another national culture; with reference to the reports interviewee country of origin, a
comparison will be made using the American culture. On a micro perspective level, critical
incidents that the interviewee highlighted during the interview will be analysed using the
model to pinpoint the differences between the two cultures.

Table: Summary on Critical Incidents Encountered with Japs Counterparts

3.1.1 Collectivism vs Individualism

A fundamental reason for the cultural collusion encountered by the American interviewee will
be the apparent mismatch in dynamics between the two different cultures with reference to
Hofstedes collectivism & individualism dichotomy. According to the Hofstedes model,
Japanese managers will be twice more likely to express collectivist values than their
American counterparts. Dahl (2002) stated: Collectivist societies place greater attention
towards personal relationships and group harmony. They are also more concerned with
collective goals and the group unity as a whole; in comparison, Individualist cultures
emphasize individual goals, initiative and achievement; variety to conformity in work is
preferred and strong emotional connections with the organization are non-existent.

With the above analysis, it reinforced the experience that our interviewee had encountered:
Japanese members of the business unit are committed towards the maintenance of a
harmonious appearance of a cohesive unit. The American culture however encourages the
behaviour of speaking out individually, for example, critiquing and evaluating the points
bought forth by other colleagues; which our interviewee did but was silently opposed by his
Japanese counterparts. Rather than speaking out openly, the Japanese instead saves its
critical questions for private discussion or in follow-up negotiation sessions where such
questions are put forth, carefully phased. One of the cultural value that the Japanese
embraced is face; by speaking out as what Andrew did, it amounts to a loss of face, which
negatively impact the relations between Andrew and his Japanese counterparts. On the
other hand, Andrew was left frustrated due to the slow pace of negotiations; the Japanese,
supporting the notion of Collectivism, are much more willing to present a solid front of unity;
this acts as a form of resistance to move negotiation away in a direction or pace that they
are uncomfortable with.

3.1.2 Uncertainty Avoidance

Hofstede (2001) stated: Uncertainty Avoidance is the extent to which people feel threatened
by ambiguous situations and have created beliefs & institutions to avoid these. He further
emphasized that countries with high uncertainty avoidance tend to have a high need for
security; they also tend to place higher emphasis on tried & tested expertise, unlikely to
take on high risks, and are averse to ambiguity.
Based on Hofstedes analysis, Japanese managers are likely to be twice as averse to
uncertainty as compared to their American counterparts. As seen, this is also another source
of frustration for Andrew. Having an education from the University of Cornell, Andrew favors
taking risks; he is more willing to apply new ways and novel approaches towards problem
solving; which collides with the Japanese style and opposed by his superiors.
As such, this also explains why during business negotiations, Andrew encountered more
periodic periods of silence whenever he prompt issues with his Japanese counterparts; the
Japanese are more unwilling to speak out directly. To the Japanese, vocal communications
are more prone to ambiguity than written communications; by speaking out, it might translate
to a commitment that they might regret at a later stage. Furthermore, the Japanese will not
prefer an action that might cause the counterparty to suffer a loss of face; such risks are
prevalent in a counter argument that the American culture endorses.

3.1.3 Power Distance

Power Distance is defined by Hofstede (2001) as the extent to which less powerful
members of the organizations accept that power is distributed unequally. People in
countries that are found to have a high scoring in this dimension tend to follow orders as a
matter of procedure; they normally blindly obey the orders of their superiors. Based on
Hofstedes analysis, Japanese employees are more concerned for hierarchy and authority
as compared to the American culture.
With reference to Hofstedes individualism dimension, in an American context, the overall
decision maker tend to declare his leadership presence by ensuring their own face time
through helming the negotiations with all parties involved. The proposition of Japanese
senior leadership is much different; they do not like to stand out from the group, instead
they prefer to facilitate leadership and decision making behind the scenes. This goes in line
with Japanese cultural values, but collides with Andrews cultural upbringing.

3.1.4 Time Orientation

Hofstede (2001) defined this dimension as being concerned with the time frame in which the
individual operates. As seen from the interview, Andrews source of frustration with the
Japanese slow pace of negotiations shows the Japanese favouritism of a long term time
orientation. Jackson and Tomioka (2004) stated that short term orientation is concerned with
the present and immediate future, placing priority on obtaining immediate gratification. On
the other hand, long term orientation focuses on long term gain; sustainability is the ideal.
As Luthans and Doh (2012) emphasized, although it seems that this dimension may seem
to contradicts the Japanese bias over uncertainty avoidance; however, it can be said that
with influence from the Deming Management Method, long term orientation to the
Japanese means having confidence in its human capital to respond effectively to the future
business landscape. Ouchi (1981) suggested that the Japanese felt that the short orientation
of the American culture like Andrews displays a lack of trust in ones employees which will
impact group harmony.

3.1.5 Masculinity vs Femininity

According to Hofstede (2001), Masculinity is defined as a situation in which the dominant
values are success, money and material factors. This trait emphasizes assertive and
competitive attitudes. Femininity however is defined by Hofstede (2001) as a situation in
which values are caring for others and the quality of life.
Based on Hofstede analysis, the Japanese culture is ranked top (score of 95) in terms of
attachment towards Masculinity values; which might in fact be contradicting as Japanese
culture valued human relations to a huge extent. This contradiction can explained: in
combination with Japanese emphasis on a collective society and positive human relations,
the Japanese do not present competitive & individual behaviours that we tend to associate
with a Masculine society.
With high Masculinity, this might explain Andrews dissatisfaction; the Japanese counterparts
are not willing to speak out openly as they feared making mistakes, which might give a
impression that they are incompetent, which will conflict with a Masculinity culture.
9

3.1.6 Graphical Presentation on Hofstedes Model for Both Countries

Japan's Ranking on Hofstede Model

Long Term Orientation

88

Uncertainty Avoidance

92

Masculinity

95

Individualism

46

Power Distance

54
0

20

40

60

80

100

America's Ranking on Hofstede Model

Long Term Orientation

26

Uncertainty Avoidance

46

Masculinity

62

Individualism

91

Power Distance

40
0

20

40

60

80

100

10

4.1 Further Analysis on Interview

Summary of Interview:

Overall Organizational Culture: Harmonious & Collectivist

Strong Emphasis on Teamwork
Paternalistic Leadership with Elements of Theory Z Managerial Style
Group Based Reward System
Decisions were made through Group Discussion and Consensus
Ringi decision making
Strong influence of the Deming Management Method on Performance Appraisal
Low key, long term approach towards Performance Appraisal

4.1.1 Paternalistic Leadership

Haire et al. (1966) stated that Japan is reputed for its paternalistic approach to leadership,
which is highly consistent from the interview with Andrew. With a culture promoting high
safety & security needs, alongside the various core cultural values mentioned earlier, the
leadership style that is highly visible in Japan is in line with a paternalistic approach. Luthans
and Doh (2012) describe it as to be one which uses work centered behavior coupled with a
protective employee-centered concern.

Table: Qualities of an Effective Leader in Japan

11

In such a leadership culture, employees are expected to work hard; in return, they are
promised employment along with superior welfare benefits; this is highly relevant in Japan.
Firstly, the Japanese practiced shu-shin-koyo or lifelong employment in their renowned
family patterned company system. Secondly, Japanese workers are willing to put in long
hours for their kaisha or company in return for such a benefit given. In actual fact,
Jackson and Tomioka (2004) stated that in Japan, the companys concern over the life of all
employees actually extends far beyond the workplace itself. With efforts made by the
Japanese managements to safeguard their employees welfare both within and outside the
workplace, the end result is a strong sense of attachment to the company held by their
employees. Summarizing, the total loyalty and effort given by the Japanese employees is
reciprocated by the common Japanese company culture of providing total concern for its
employees, which is seen from the interview.
The creation of informal and emotive interpersonal relations between the manager and his
subordinates is very much encouraged in Japan, which is the direct opposite of an American
approach towards its leadership style. The role of a Japanese leader is one of a facilitator
with a main responsibility of nurturing group harmony; which is different from an American
context whereby the leader is the decision maker.

4.1.2 Performance Appraisal in Japan

Performance Appraisal (PA) is a challenging task in Japan due to collectivist cultural values;
there is an unavoidable emphasis on harmonious group relations, activity and overall results
instead of individual track records. The challenge is to implement a reasonable objective
appraisal system that fulfills cultural norms while fitting the corporate climate in Japan.
To scrutinize ones performance against another, this will result in a winner and a loser on
the rating scale; ultimately, this will mean a painful loss of face, which is taboo to the
Japanese culture. Furthermore, in American culture whereby it is a norm to analyze the
negative behavior found during appraisal, it is a burdensome assignment for Japanese
supervisors.
From Andrews interview, his organization also failed in the implementation of a 365 Degree
Feedback system; Peer rating is widely accepted in the American culture. However, in Japan
the notion of rating follow colleagues while disclosing the results to the higher authority is
totally unaccepted; they view it as a disruptive action to group relations.
Jackson and Tomioka (2004) disclosed that until recently, PA is completely reliant on the
factor of nenko or years of service as the basis for promotion and salary decisions; it must
not be forgotten that the Japanese culture place an emphasis on seniority based
pay/promotion. However, with years of low growth, merit rating has assumed an important
role in PA; theres a need to be accountable to shareholders.
As the interview disclosed, Andrews organization appraise their employees twice a year;
this is consistent with what Haire et al. (1966) stated: Japanese companies rate their
employees performance more frequently than American organizations as bonus payments
are of a higher frequency in Japan; they are normally awarded in summer and winter.
In American context, PA is conducted once a year; the interview disclosed that it is a time
consuming and distracting procedure; quality of work may suffer as employees place their
attention towards impressing their superiors instead. To Andrew, he observed that the same
level of uneasiness is not applicable to the Japanese culture; of which is attributed group
trust, harmony that is emphasized. Supporting evidence from Ouchi (1981) stated, in Japan,

12

post appraisal interviews are also rarely conducted. Instead, Superiors tend to carry out talks
that are informal when discussing PA results with subordinates. In line with Japanese values,
such talks are normally supportive and are not directly related to salary or promotion
arrangements. On the ground, a single appraisal is rarely used as the basis for immediate
action; corporate decisions are taken based on a collection of results; the Japanese are
known for not making hasty decisions.
During the interview, the term Deming Management Method is also disclosed. According
to Ouchi (1981), it is conceptualized by Dr W. Edwards Deming, who was partially
responsible for the Japanese economy recovery. He preached that PA is negative; with a
scope on short term results, its deemed to be a management tool of fear that destroys
teamwork, cultivate a suspicious environment in the workplace in his own words. Many
Japanese companies are heavily influenced by the ideologies of Dr Deming, and thus the
explanation for the Japanese approach of a low key and long term view towards PA.

4.1.3 Psychological Contract of the Japanese

Culture
Noe et al. (2014) defined the term Psychological Contract as a description of what an
employee expects to contribute in an employment relationship and what the employer will
provide the employee in exchange for those contributions. From the interview, it can be
inferred that the Psychological Contract is highly visible in Japanese business
management.
Due to Paternalistic Leadership being favored by the Japanese, the relationship between a
Japanese employer and employee tend to be one that is highly fraternal. Lacking tangible
form, the Psychological Contract is fulfilled through human relations; Jackson and Tomioka
(2004) stated that Japanese organizations tend to emphasize the management of
interpersonal relations while focusing on elements such as teamwork, flexibility and
generalist knowledge instead of stressing the achievement of specified tasks; it resulted in
employees becoming emotionally bounded to the organization which is amplified due to the
vertical society of Japan. In return for loyalty, life-time employment and seniority based
pay/promotion are offered; two factors of which are the main pillars of business
organizations in Japan.

4.1.4 Japanese Decision Making

The interviewee mentioned that the first step in Japanese Decision Making comprises of
informal talks to gather support and feedback for the potential change. Hayashi (1989)
defined this process as Nemawashi. It is known as the informal discussion that precedes
formal decision making in Japanese organizations. Loosely translated in English, it means
going around the roots; Nemawashi helps to smoothen out the decision making process
in Japan. Without establishing people relations, it is almost impossible to gain acceptance for
a proposed decision; securing amicable relations with key office holders is the only way to
make ones voice effective in a Japanese context.
As Andrew experienced, there are rarely open disputes during meetings; critique is also
often presented in a moderated format by respectfully presenting views of an alternative
position. Hayashi (1989) pointed out that discussion also tends to move at a snail pace,
much like snappers clearing a minefield in his own words as participants progress and talk
conservatively so as not to present an image of demolishing points that others brought
forward.

13

Consensus style decision making is much appreciated in Japan, due to the collectivist nature
of the society. Ouchi (1981) stated that Japanese organizations employ a great deal of effort
in ensuring a group consensus on decisions; there is a strong preference over group
decisions, instead of individual ones. The process of consultation and sharing of information
is consistent with the value of reference groups in Japan; it is ideal to let members feel that
they played a significant role while sharing collective responsibility for decisions taken.
According to Jackson and Tomioka (2004), the Ringi-sho system is also heavily utilized in
Japanese business culture. The Ringi-sho system is defined by Ouchi (1981) as the act of
obtaining approval on a proposed decision through vertical circulation of documents to the
people concerned. Essentially, this means the proposal for change is circulated from lower
level of hierarchy all the way up to top management; when approved at one level, a seal is
affixed to the document. When there is opposition at any level, the proposer must thereby
convince the dissenters. It will receive formal authorization when it reaches the top
management; thus the Ringi-sho system is known as a consensual understanding
process of decision making, it is highly merited for increasing group participation in Japan.

4.1.5 Occurrence of Groupthink in Japanese Context

According to Robbins (2012), there are two by-products of group decision making that have
the potential to negatively impact a groups ability to appraise alternatives objectively to
obtain high quality solutions. One of which, coined the Groupthink is present in our
interviewee analysis of the Japanese business culture.
Groupthink is defined as situations in which group pressures for conformity deter the group
from critically appraising unpopular, minority views. This is relevant in the Japanese context.
With Ninjo and Amae based interpersonal relationships, it resulted in a high degree of
emotional attachment that led the Japanese business unit to enter a seemingly irrational
decision, which was experienced by Andrew. Furthermore, with a preference to conserve
group harmony, the Japanese tend to avoid pinpointing the outcomes of a particular decision
to an individual.
It is noted that the individualist American culture have long held a view that managerial
decision making process should be an informed & rational process in which the supervisor
selects a evaluation criteria and utilize it to determine a practical solution to a problem on
hand. However, from a Japanese perspective, decision making is dependent on cultural
norms, values and behavioural patterns of the reference group; this tends to result the
process to be irrational and emotional. Furthermore, the Japanese are known to be
obsessed about not losing face; as seen from the interview, the Japanese counterparts that
Andrew met rationalized his resistance to the decisions made despite strong contradicting
evidence; they reinforced their decisions to protect themselves from a potential loss of selfesteem. With elements such as emotional, irrational decisions along with a need to protect
their pride, this often leads to groupthink scenarios that Andrew experienced.

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5.1 Conflicts between OC and NC

Schein (1987) defined Organizational Culture (OC) as a companys underlying assumptions,
shared values and norms that determine its corporate behavior. Deal and Kennedy (1988)
stated that OC and National Culture (NC) are important factors in determining work attitude
and behavior. In reality, the ideals of NC and OC may be in conflict; there is a notion put
forth that a strong NC might in fact dominate OC instead. There is a level of interest in this
notion, as the relative strength of NC or OC will be crucial in determining Organizational
Behavior (OB); the winning element will play an influential role in determining a companys
OB. The question thereby is: is NC able to overcome OC when the two elements are up
against each other?
In a Japanese context, our interviewee had explained via his own experience, NC still is the
dominating factor over OC; this might be biased to a certain extent as the company he is
working for has Japanese roots to begin with. However, Jackson and Tomioka (2004)
argued that OC is almost created in the context of NC; they suggested that OC is usually
expressed in management practices, but essentially such practices are often either
reinforced or resisted by the values of NC.
Berry et al. (1992) supported the stance by Jackson and Tomioka (2004); they contended
that there is minimal evidence to imply major differences in values between employees of
different organizations within a more or less culturally homogenous country. Mead (1994)
reinforced this notion by indicating:
Adding on, Ouchi (1981) stated that in a Japanese context, OC is highly unlikely to alter NC
when both elements come into conflict as the first is usually overridden by NC. It is also
believed that when values and beliefs of NC are threatened by OC, dysfunctional work
behavior will result. Hofstede (1985) maintained that NC should be understood as the
strongest force shaping corporate culture. In conclusion, it is important to understand how
NC shapes OC; and how to create a synergy between both factors so that conflicts will not
occur.

15

6.1 Changing Values of the Japanese

Traditional Values:

Collective Recognition for Exceptional Service to Organization

Harmonious Relations between Subordinates and Superiors
Co-operation with Groups
Life Long Employment
Seniority Based Advancement
Reward System Stressing Years of Accumulated Service
Long Working Hours

Emerging Values:

Earnings
Quality of Life
Personal and Professional Challenges
Individual Recognition and Satisfaction for Outstanding Performance

As per the interview, Andrew stated that due to years of stagnant growth, the business
practices such as lifelong employment are feeling the strain; with low growth, many lower
levels are inflated with employees; there is lesser chance of promotion for everyone. As a
result of bearing this scenario, individual incomes are getting lesser; elements of
dissatisfaction with the traditional cultural values in Japanese management culture are
surfacing. Jackson and Tomioka (2004) stated that there is an increase of Japanese middle
management who seeks out challenges in job responsibilities. This observation suggested
that as job security and seniority promotion opportunities decreases, the Japanese are
becoming less risk averse and are willing to forego lifelong employment in search of
challenges; applying the Maslow Hierarchy of Needs, this translated that more Japanese are
seeking opportunities to fulfill their needs of Esteem or Self-Actualization. Individualism
elements are also surfacing, with an increasing percentage of Japanese focusing on
individual compensation benefits; many had become enchanted with the traditional reward
and promotion structure. In summary, with prolonged low growth, it had resulted in a change
of traditional cultural values in Japan, to a certain extent.

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