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 Whole area-377,812 sq km (India-3,287,263
sq km )
 Extension: approximately 3000 km
 Capital-Tokyo
 The main islands, called the "Home Islands",

are from north to south Hokkaidō, Honshū

(the "mainland"), Shikoku and Kyūshū.
 6800 smaller islands, including Okinawa,

some inhabited and others uninhabited

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 Population-127.7 million (India-1.03 billion)
 Population density-343 persons per square

kilometer
◦ ranking it 5th among countries with a population
of 10 million or more

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 Political Framework
◦ Political Structure
Democratic monarchy where the Prime Minister of
Japan is the head of government, and of a multi-
party system
Executive power is exercised by the government
Generally considered a constitutional monarchy
-based largely upon the British system
Legislature – Bicameral parliament
House of Representatives with 480 representatives
House of Councillors with 242 representatives

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 Political Framework
◦ Tax Regime
Corporate Tax-corporate tax (national tax), corporate
inhabitant tax (local tax), and enterprise tax (local
tax)

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 Political Framework
◦ Tax Regime
consumption tax -5%
Personal Taxes
Non-residents who earn salary income paid
for services provided in Japan and not
deemed subject to withholding tax in Japan
must file a return and pay a 20% tax on the
total amount of that salary

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 Political Framework
◦ Foreign Investment Policy
To promote FDI, the JP government established
"Invest Japan Business Support Centers" to serve as
one-stop centers for support and information on
investment.
The IBSCs provide various information on investment
procedures to foreign businesses setting up an
operation in Japan. Initial screening by the Overseas
Investment Commission (OIC)
Currency – freely convertible
FDI = 2.5% of GDP

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 Political Framework
◦ Trade Agreements
Economic Partnership Agreement with Singapore,
Brunei, Malaysia, Thailand, Mexico, Chili, Indonesia
as of 1/Aug/2008

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 Political Framework
Unemployment rate- 5.2% (May 2009)

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Source: Ministry of Internal Affairs and Communications of Japan
 Economic Framework
◦ Facts and Figures
GDP (PPP Terms) - $4.35trillion (2008)second after
US
Japan's Trade Balance of Goods & Services-
$83.47billion in 2007 ($17.78 billion in 2008 *trade
deficit with the Middle East)
◦ Main Industries: Banking, insurance, real estate,
Manufacturing, retailing, transportation,
telecommunications and construction
◦ The service sector accounts for three quarters of
the gross domestic product
◦ Labor force - by occupation:
agriculture 4.4%, industry: 27.9% services:
66.4%
◦ Low Food self-sufficiency rate (calorie basis) -
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 Economic Framework
Exports –transport equipment, motor vehicles,
semiconductors, electrical machinery, chemicals
Imports –machinery and equipment, fuels, foodstuffs,
chemicals, textiles, raw materials

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Source: JETRO
•Economic Framework
•Exchange Rates - \271.33/US$ in Oct 1982 to \96.58/ US$ in June
2009

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Source: Bank of Japan
 Social Framework
◦ Cultural Perspective
Ethnic groups: Japanese 98.5%, Koreans 0.5%,
Chinese 0.4%, other 0.6%
note: up to 230,000 Brazilians of Japanese origin
migrated to Japan in the 1990s to work in industries;
some have returned to Brazil (2004)Religious
Perspective
Shintoism 83.9%, Buddhism 71.4%, Christianity 2%,
other 7.8%
note: total adherents exceeds 100% because many
people belong to both Shintoism and Buddhism

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 Technological overview
◦ One of the leading nations in the fields of
scientific research, technology, machinery and
medical research
◦ Even small and medium sized enterprises are
attractive to large foreign companies
◦ Budget for R&D = 3.61% of GDP
◦ Over 709,000 researchers

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Strength
 One of the most advanced Science and
Technology
 Existence of Industrial Cluster and government
incentives
 Sophisticated consumers with high purchasing
power
 Japan’s importance as a creative center is
increasing
 One of the ultimate testing grounds for new
developments
 The economy with the second largest GDP in the
world
 Highly effective transportation system
 5th most peaceful country in the world
 Existence of powerful industry
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Weaknesses
 Population Density in metropolitan zones
 Regional Distribution
 Decline of self-sufficiency of food
 Some Japanese have difficulty speaking
English
 Japanese people do not show their actual
mind what they think, so sometimes takes
time to get to conclusion
 Heavily depending on import of energy
resources and raw materials

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Opportunities
 Access to new Asian markets since Japanese
companies continue to expand their market reach
throughout the East Asia region
 The environment for expansion of foreign
companies into Japan is steadily improving
compare to 10 years ago
 Environmental market is Expanding due to the
government's advancement of environmental
laws.
 Booming business in silver care and retirees (ex.
senior care services and others)
 The customer wants new things all the time
 Japan is a consumer society where quality is
highly valued
 Japanese customers tend to pay money to try
using a new technology
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Treats

 Declining Birth Rate

 The negative relationship with North Korea
 Rapid economy growth of China

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 Success stories

Source: JETRO
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 Japan- Home for many multinational firms -
Toyota, Sony, Honda, Canon, Sharp, Sanyo,
Panasonic, Kawasaki, Suzuki, Mitsubhishi,
Hitachi etc
 What are the secrets of success of Japanese
firms? Should we attribute their global success
to the unique Japanese culture based on
collectivism, harmony and politeness? Or
because of Innovation & Quality consiousness ?
Technology?
 In 1950s and 1960s, Japan was a poor country
after the second world war and bomb attacks in
Japanese cities.

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 What is the factor that motivate customers in
many countries to prefer ‘Made in Japan’
compared to products made in other countries?
 Despite the fact that many Japanese do not
speak English fluently, japan had risen like a
phoenix bird in 1970s because of their
hardwork, teamwork and desire to achieve
greater highs. Their remarkable achievements
in 1980s can be linked to their unique culture
rooted in values like Harmony at Workplace, as
against arguments in the name of democracy in
India.
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 Notonly Japan has achieved many
laurels worldwide, but also they
have been successful in getting the
‘Visa on Arrival ‘ facility for all their
passport holders (120 million
people) for 3 months from more
than 50 countries in the world,
which include all developed
countries.
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 Almost, all the employees including clerks put
in 11 hours in office, meaning aggregate labour
output in Japan is much higher than India.
 International Quality
 Do they get paid well? Yes. Japanese labourers
and staff work hard with team spirit with
positive attitude and long term orientation. The
employers reward them very well with twice a
year bonus. According to labour , even a part
time labourer should be paid 800 yen (400
Indian Rupees) per hour.

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 No doubt, Japanese system is based
on win-win strategy when it comes to
employee-employer relationship. On
the other hand, Indian companies
struggle to manage human resources
(It leads to labour problems and shut
down of plant many times). Let us try
to adopt mutually beneficial strategy

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 Japan has also been ranked among the most
peaceful countries in the world because there
are no hartals, strikes, shootouts and street
processions by political parties or religious
groups. They don’t fight each other. like
Indians . Most of them follow Shinto-ism
which is based on harmony and human
values. Japan is also known for Bow which
they do for greeting others. This has roots in
their culture and is considered as a symbol of
their politeness and respect for others.

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 Japanese management style is the
culmination of long term view, strong
discipline and strategic thinking.
They believe that it is important to
maintain loyalty, harmony, respect
and consensus at workplace.
Therefore, Japanese people
emphasise more on ambiguity to
avoid conflict or maintain harmony
within the group.
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 No doubt, harmonial relationship always
facilitates the work and in turn leads to
higher efficiency and better labour
productivity,

 Visit www. drjustinpaul.com for accessing

the full text of my books & blog on japan
etc.

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