Negotiating International Business - Japan

This section is an excerpt from the 2017 edition of the book “Negotiating International Business - The Negotia-
tor’s Reference Guide to 50 Countries Around the World” by Lothar Katz.

Many Japanese businesspeople are experienced in interacting with other cultures. However, this does not
mean that they are open-minded. When negotiating business here, people expect that you understand
and follow the Japanese way of doing things. After all, this country, with its history as an isolated ‘Island
Nation,’ is culturally very homogeneous and commonality of customs is considered highly desirable.

Relationships and Respect

Japan’s culture is strongly group-oriented. Individual preferences are less important than having a sense
of belonging to a group, conforming to its norms, and maintaining harmony among its members, who
are expected to develop an intense loyalty to the group as a whole. Building lasting and trusting per-
sonal relationships is therefore critically important. While members of other cultures may expect this to
happen gradually over the course of a business engagement, most Japanese expect to establish strong re-
lationships prior to closing any deals. Your local partner wants to know that you and your company are
strongly committed to this relationship and that they can depend on you. Proceed with serious business
negotiations only after your counterparts have become comfortable with you. Since people are generally
suspicious of foreigners, gaining their trust and establishing good will is going to take time.

Once you have reached that point, the Japanese may still prefer to keep the initial engagement small
and low-risk. They view this as an opportunity for you to prove yourself. Larger-scale business engage-
ments require time to build. Since the Japanese are very long-term oriented, they usually prefer this slow
approach. It is very important to emphasize frequently the long-term benefits and your commitment to
them and to the business relationship you are seeking to build. Keep in touch on a regular basis through-
out all stages of your business engagement, but realize that the strength of a relationship in this country
depends much less on whether someone likes you than on whether they consider you trustworthy and
dependable.

Business relationships in Japan may exist both at the individual and at the company level. However, the
former weighs more strongly. You need to build corporate relationships at all levels of the organization,
not just at the top. It is critically important for most Japanese to deal with others they know, respect, and
trust. However, if your company replaces you with someone else over the course of a negotiation, it may
be somewhat easier for your replacement to take things over from where you left them if your company
is already considered dependable. To ease the transition, the person who enjoys your Japanese counter-
parts’ strongest trust must endorse the new team member as an influential and dependable person.

In Japan, the concept of face is possibly even more important than in other Asian societies. Reputation
and social standing strongly depend on a person’s ability to control emotions and preserve group har-
mony. The importance of diplomatic restraint and tact cannot be overestimated. Always keep your cool
and never lose your composure. Causing embarrassment to another person could cause loss of face for all
parties involved and can be disastrous for business negotiations. If you have to bring up an unpleasant
personal topic with someone, never do so in public and always convey your message in ways that show
respect for the other person.

‘Giving face’ is crucial to develop relationships. Showing great respect for and genuinely praising the
group or organization will be favorably noted. However, never single out a Japanese person, whether

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for praise or criticism, in front of the group. Doing so embarrasses him or her and may cause the person
as well as the group to lose face. The group identity always prevails. However, privately complimenting
a person is appreciated.

It is polite to apologize often. A person may express profound apologies for being a few minutes late,
having a cold, taking you out for dinner to a place where the food turns out to be only average, and for
virtually any other aspect of daily life you may not even consider worth mentioning. Humility is valued
very highly in this country, and foreigners are encouraged to show a similar attitude.

Requesting a favor from someone in Japan with whom you do not have an existing relationship is con-
sidered inappropriate and may be altogether ignored. Once relationships exist, they are bound by a rigid
concept of mutual obligations. In western societies, people connected through close relationships may
expect certain favors of each other, but they are usually forgiving if circumstances get in the way. In Ja-
pan, such obligations are non-negotiable and must be fulfilled without exception. Even small favors can
create such obligations. For example, if you ask someone to introduce you to someone else, the interme-
diary has an obligation to the other party if he or she does so. Should you later prove unworthy of this
connection, for instance by failing to meet your commitments, the intermediary loses face. Since this can
have significant consequences for these intermediaries, they will only make such introductions if they
are convinced that they can trust you.

In Japanese business culture, the respect a person enjoys depends primarily on his or her age, status,
and rank. You will commonly find leaders in senior roles to be of advanced age. It is very important to
treat elderly people with the greatest respect. Japan is not an egalitarian society. Nevertheless, humility
is highly valued, and the Japanese are masters of subtlety. Other admired personal traits include loyalty,
team orientation, and sociability.

Communication
The country’s official language is Japanese. Most local businesspersons, even younger ones, do not speak
and understand English well. The understanding of written text is better than that of spoken English,
so it is always a good idea to bring written proposals and confirm key points of oral communications in
writing. Pause frequently and give the Japanese side time for translation and discussion. Verify through
diplomatic questions whether your counterparts understood you. Since saving face is so important, peo-
ple will not openly admit it in front of others if they do not understand what you are saying. If in doubt,
try writing down key points on paper or on a white board.

In some cases, it is necessary to have an interpreter. Politely inquire beforehand whether an interpreter
should be present at a meeting. However, keep in mind that even interpreters may not always speak
and understand English at a fully proficient level. Also, realize that in this strongly relationship-oriented
culture, an independent interpreter hired by you for a meeting is viewed an as outsider by the Japanese
side, so your counterparts may be reluctant to speak openly. At the same time, interpreters may feel no
allegiance with you, so they may be telling you what they think you want to hear rather than what the
other side said. It is highly recommended to use someone from within your company as a negotiation
team member who can translate, or correct the translator on missed key points. If that is not an option,
it is better to ask the Japanese side whether they can provide someone within their team to handle
translations. When communicating in English, speak in short, simple sentences free of jargon and slang.
Pausing as often as you can gives people a better chance to translate and understand what you said. Also,
allow for frequent side discussions in Japanese.

Japanese businesspeople usually speak in quiet, gentle tones. Maintaining a low-key and polite manner
is important, and showing emotional restraint at all times is essential. Do not show anger or other neg-
ative emotions. Instead, mask these feelings with a smile. Conversations may include extended periods
of silence, sometimes as long as ten seconds or more. This signals neither agreement nor rejection. At

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restaurants, especially those used for business lunches and dinners, keep conversations at a quiet level.
Loud and boisterous behavior may be perceived as a lack of self-control. People generally converse while
standing around three to four feet apart.

Because the concept of face is pivotal in this culture, communication is generally extremely indirect, even
more so than in other Asian countries. When responding to a direct question, the Japanese may answer
‘yes’ only to signal that they heard what you said, not that they agree with it. Responding to a question
or request with a direct ‘no’ is rarely an option in Japan. The strongest expression you may hear is ‘that
may be very difficult,’ which is a clear-cut ‘no.’ Alternatively, you may receive seemingly ambiguous an-
swers, such as ‘I am not sure,’ ‘we will think about it,’ or ‘this will require further investigation.’ Each of
these indicate serious problems that need to be resolved. In your own communication, try to be equally
polite and indirect. Avoid open refusals, disagreement, or confrontations at all cost. If you have to con-
vey bad news to the Japanese side, the face-saving way is to also combine it with some good news or an
acceptable solution.

In many societies, the sender is responsible for getting the message across. In Japan, it is the receiv-
er. Asking for clarification if something was too ambiguous is therefore acceptable. In addition, asking
questions more than once is a way to get a complete answer. Saying ‘Yes,’ which you hear all the time,
only means ‘I heard what you said’ – it does not signal understanding or agreement. A way to get a clear
statement even if it might be negative is to phrase your questions such that the respondent can answer
with ‘yes.’ An example would be ‘do you have concerns?’

Gestures are usually very subtle in Japan. It is strongly advisable to restrict your body language. Non-ver-
bal communication is very important, though, and you should carefully watch for others’ small hints,
just as they will be watching you. Do not make physical contact with other people except for handshakes.
Do not use your hands when speaking since it may distract the Japanese. The American OK sign, with
thumb and index finger forming a circle, means money in Japan. Pointing at people or objects is very
impolite. Instead, wave your open hand toward the object. When referring to themselves, people put an
index finger on their nose rather than pointing at their chest as Westerners do. Sucking in air through
the teeth indicates that there is a serious problem. If the person puts a hand on the back of the neck at
the same time, it signals, ‘This is impossible.’ Scratching the back of one’s head, frowning, or scratching
the eyebrow indicate apprehension or rejection. Moving the open hand in front of the face in a fanning
motion, with the palm facing left again signals a negative response. Do not blow your nose in public
since people find this repelling.

Unless strong personal relationships exist with a person, eye contact should be infrequent. Lowering
one’s eyes is a sign of respect. However, there may be intensive eye contact between friends or long-term
business partners. If someone closes his or her eyes during a discussion, presentation, or speech, the Jap-
anese assume that the person is listening attentively, while Westerners may erroneously assume that he
or she is taking a nap. Smiles and laughter do not always indicate friendliness, amusement, or approval.
They may mask a lack of understanding, embarrassment, disapproval, and other feelings of distress. Ac-
cordingly, Westerners may sometimes observe Japanese people smiling or laughing at what they might
consider inappropriate moments.

Initial Contacts and Meetings

Before initiating business negotiations in Japan, identify a highly respected local person with whom you
have or can establish a good relationship. Then, ask for this person’s endorsement and connection to the
potential Japanese partner you are targeting. Choose the intermediary carefully and consider the face
issues for everyone involved. An intermediary should not be part of either one of the parties involved in
the business interaction.

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Negotiations in Japan require a team of negotiators instead of relying on a single individual. Always
select your team members carefully. A negotiation team should be composed of people filling several
functional roles, including both subject experts and specialized negotiators. It is vital that your team is
well aligned. Disagreeing with each other in front of the Japanese can be disastrous. The size of your
team conveys the level of seriousness, so larger is better. If possible, find out who will participate on
the Japanese side, and match your team members up with them for closer relationship building. Status
matters a lot, and a mismatch could be embarrassing for everyone. Changing a team member may re-
quire the process of building relationships to start over. However, if you introduce a new person from
your company into an existing business relationship, that person will become a valid negotiation partner
more quickly than if your company has no previous history with the Japanese side.

Given the strong emphasis on hierarchy in the country’s business culture, a senior executive should at-
tend the initial meeting for your company and your negotiating team should include senior leaders who
know your company well. There will not be an expectation for this executive to attend future meetings.

If possible, schedule meetings at least three weeks in advance. The Japanese do not like surprises. Since
they want to know who they will be meeting, provide details on titles, positions, and responsibilities of
attendees ahead of time. One-on-one meetings are very rare and require strong existing relationships
and trust. Communicate the meeting purpose and agree on an agenda with your counterparts ahead
of the meeting. The agenda is usually strictly followed. At any meeting, whether business or social, it is
strongly advisable to be very punctual. If a delay is inevitable, call ahead and apologize profoundly even
if it was not your fault.

Names are usually given in the order of first name, family name. It is possible to use Mr./Ms. plus
the family name. However, it is more respectful to address a male Japanese person in the traditional
way, with the family name followed by ‘-san.’ A person named Hiroshi Watanabe thus becomes ‘Wata-
nabe-san,’ which roughly means ‘honorable Mr. Watanabe.’ If the person has an academic title, you can
use it, again followed by family name and ‘-san.’ Never call Japanese people by their first name unless
they insist on it. Wait to be introduced rather than introducing yourself. Introduce and greet older people
first. Japanese-style introductions are accompanied by bowing, following a complicated ritual which for-
eigners are not expected to know or comply with. Instead of trying to bow at the risk of getting it wrong,
respond with a nod of the head if someone bows at you, and then follow through with a handshake.

The exchange of business cards is an essential step when meeting someone for the first time, so bring a
lot more than you need. Under no circumstances should you use paper copies because you ran out of
cards. Business cards are symbols of ‘personal identity.’ If someone presents you with his or her card
and you do not offer one in return, the person will assume that you either do not want to make their ac-
quaintance, that your status in your company’s hierarchy is very low, or, quite to the contrary, that your
status is very high. Use cards where one side is in English and the other in Japanese. Show any advanced
degrees as well as memberships in professional associations on your card. Also, make sure that it clearly
states your professional title, especially if you have the seniority to make decisions. Present your card
with two hands, and ensure that the Japanese side is facing the recipient. Similarly, accept others’ cards
using both hands if possible. Smile and keep eye contact while doing so, then examine the card careful-
ly. Not reading someone’s card can be an insult. Next, place the card on the table in front of you or into
your card case. Never stuff someone’s card into your back pocket or otherwise treat it disrespectfully. In
addition, never write on a person’s business card. People of high rank may have their card presented by
subordinates.

At the beginning of a meeting, there is normally some small talk. This allows participants to slowly be-
come personally acquainted. Light humor may be welcome, although you should avoid western-style
jokes. It is best to let the local side set the pace and follow along. Overall, negotiations are generally very
formal and serious. The primary purpose of the first meeting is to get to know each other and start build-
ing relationships and mutual trust. It would be very unrealistic to expect a meeting to lead to a straight
decision.

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The highest-ranking person in a Japanese group may be difficult to pick out. It could be the one who
says the least. To know for sure, look at their business cards. In addition, the person with most authority
enjoys the middle position at the table. However, do not just speak to the person with the most authority.
Always respond to the person who is doing the talking or asking the questions. Be respectful to everyone
in the meeting.

Begin your part of the meeting with remarks about individual and company relationships, even if there
is just a short history. Also, emphasize the status, size, and accomplishments of your company if pos-
sible. It is good to make a presentation, but keep it simple and avoid over-designing it. Refrain from
discussing the pros and cons of an aspect in the same context, as this might confuse your counterparts
and could raise mistrust.

You should bring a sufficient number of copies of anything you present, such that each attendee gets one.
Presentation materials can be simple without colorful backgrounds and fancy graphs. However, good
and easy-to-understand visuals are important. A persuasive presentation describes how your product or
service can enhance the prosperity and reputation of the Japanese side. Presentations can be very long.
The Japanese expect to discuss many details, so come well prepared, and bring enough background in-
formation. Having your handout materials translated to Japanese is not a must but helps in getting your
messages across.

Negotiation

Attitudes and Styles – To the Japanese, negotiating is usually a joint problem-solving process. The buyer
clearly has a dominant role and the seller carries a stronger burden to support that buyer than in most
other societies. Vendors are expected to do whatever it takes to satisfy their customer’s needs, and sales-
people may receive harsh treatment from unhappy clients. In extreme cases, Japanese customers may
demand to receive details of their vendors’ cost structure and expect to receive prices at some margin
above that. At the same time, both sides are expected to ‘take care of each other.’ The buyer will therefore
ensure that the seller makes a profit in the deal, though what they may consider acceptable is often lower
than in many other countries. Ultimately, both sides are partners in a mutual dependency that is bound
by their relationship. Both are expected to make a long-term commitment to their business engagement
and will mostly focus on its long-term benefits. Sellers may be expected to accept short-term losses for
longer-term gains. A Japanese buyer is interested in what the vendor will do to reduce costs in the future,
expecting that most of the savings are passed on so that both buyer and seller can enjoy more business
through reducing the cost of their product or service. The primary negotiation style is cooperative and
people may be open to compromising if viewed as helpful in order to move the negotiation forward. It is
important to be flexible and creative to get a deal that both sides are pleased to have.

Should a dispute arise at any stage of a negotiation, resolving it may require the help of an external me-
diator, ideally the party who initially introduced you.

Sharing of Information - The time spent to gather information and discuss various details before the
bargaining stage of a negotiation can begin is usually extensive. In this phase, the Japanese seek to find
the other side’s weaknesses. They rarely share information freely, since the Japanese view is that having
privileged information creates bargaining advantages. Your counterparts consider putting all your cards
on the table foolish. However, it is unwise to surprise the Japanese. If you have new information that is
significant, share it with your counterparts prior to your next negotiation round.

Keep in mind that the Japanese are very detail-oriented. If you make exaggerated claims in an effort to
impress the other side or to obtain concessions, they will likely investigate your claims before respond-
ing. This could become very embarrassing and may ruin the trust that has been built.

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Pace of Negotiation - Expect negotiations to be slow and protracted, with immense attention paid to
details throughout all stages. Relationship building, information gathering, bargaining, and decision
making all take considerable time. The opening game may be slow since your Japanese counterparts are
often unspecific about what they expect from you. Negotiators often attempt to wear you down in an
effort to obtain concessions. It is not advisable to make significant early concessions since that may be
interpreted as a lack of preparation or interest. Be prepared to make several trips if necessary to achieve
your objectives. Throughout the negotiation, remain calm, friendly, patient, and persistent. Never allow
issues during the negotiation process to create personal conflicts with your counterparts. Delays will be
inevitable, making patience extremely important if you want to get anywhere in Japan.

If your counterparts appear to be stalling the negotiation, assess carefully whether their slowing down
the process could indicate that they are not interested in doing business with you. More often than not,
though, this behavior indicates either that they need time for internal discussions, or that they are trying
to put you under time pressure in order to obtain concessions.

Bargaining - The Japanese negotiation style is very formal and tolerates only a restricted set of negoti-
ation tactics. Many techniques that may be accepted or even admired elsewhere could jeopardize the
success of a negotiation in this country. The Japanese are used to bargaining but often frown upon hag-
gling. The bargaining stage of a negotiation can be extensive. When making new proposals, a negotiating
party should explain the rationale behind them. However, some Japanese may have a dislike for making
concessions, expecting both sides to come to the table with their best offer. If you sense this to be the
case, quickly moving to a range you are willing to accept is your best strategy. Though concessions never
come easily, prices may move by about 25 to 40 percent between initial offers and final agreement. Leave
yourself sufficient room for concessions at different levels and prepare alternative options. This gives the
Japanese negotiators room to refuse aspects of your proposal while preserving face. Japanese concessions
typically come late in the bargaining, typically after a break that gave them a chance to establish consen-
sus. Aspects can be re-visited. You can use this to your advantage, for instance by offering further conces-
sions under the condition that the Japanese side reciprocate in areas that had already been agreed upon.

Deceptive techniques may sometimes be employed, and Japanese negotiators may expect you to use
some of them as well. This could include tactics such as pretending to be disinterested in the whole deal
or in single concessions, misrepresenting the value of some items, or making false demands and con-
cessions. It is advisable to verify information received from the Japanese side through other channels if
you have a chance. Similarly, they treat ‘outside’ information with caution. Another approach is to ask
further questions in order to understand underlying assumptions or data. Since negotiation teams must
act in consensus and preserve face, the Japanese do not use ‘good cop, bad cop.’ It is not a good idea to
use this tactic in your own negotiation approach. The Japanese will also not claim ‘limited authority’
because the group makes all decisions. Be cautious when using the techniques of making false demands
or false concessions. Since avoiding loss of face is critical, any overt attempts to bluff your counterparts
could backfire, killing any trust that may have been established. For the same reason, refrain from telling
lies to your counterparts under all circumstances.

Negotiators may use pressure techniques that include opening with a written offer, keeping silent, or
applying time pressure. The Japanese may remain silent, possibly for a minute or more, as a way to
pressure you into making a concession. Sometimes, silence may be a way to convey displeasure. This
tactic works in both directions. Time pressure can be difficult to counter. If Japanese negotiators learn
that you are working against a deadline, they may exploit this knowledge to increase the pressure on you
to make concessions. Near the end of a negotiation, they may suddenly request last-minute concessions
and ‘compromises.’ In extreme cases, they may try to renegotiate the whole deal on the final day of your
visit. It is important never to take such techniques personally and to avoid open conflict. Know what
concessions you are willing to make. On the other hand, time pressure techniques rarely work against
them since the Japanese are patient and persistent enough to overcome such challenges. Final offers and
nibbling are rare and should be used with great caution since they may cause loss of face. Avoid other

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common pressure tactics such as opening with your best offer, showing intransigence, or making expir-
ing offers.

Japanese negotiators avoid aggressive or adversarial techniques since these again affect face. On rare
occasions, they may use extreme openings, in which case it should not be difficult to motivate them to
move to more reasonable levels. Subtle warnings may be used on occasion, but never openly threaten
the other side in any way. Respond in kind if necessary, but do not openly discuss your non-settlement
options and alternatives.

Unlike in other strongly relationship-oriented cultures, Japanese negotiators rarely use emotional tech-
niques such as attitudinal bargaining, grimacing, guilt and embarrassment, or appeals to personal rela-
tionships. They believe that emotions have no place in business negotiations in this country.

Defensive tactics such as changing the subject, asking probing questions, making promises, or keeping
an inflexible position may be used. The exception is directness, which is very rare in this society. They
may be shocked if you are overly direct yourself, which can be counterproductive. Attempts to use
blocking techniques to keep the Japanese side from obtaining certain information may be ignored; they
will persistently repeat similar questions until they get a satisfactory answer. Making promises as an
incentive for the Japanese to reconsider their position may sometimes work well.

It can be effective to introduce written terms and conditions as a negotiation tactic. However, be careful
and continue to show flexibility if needed to allow the Japanese side to save face.

Decision Making – Most of Japan’s companies tend to be very hierarchical, and people expect to work
within clearly established lines of authority. While Japanese decision making is a group process through
which consensus is established, an individual manager, rather than a team, is the one making the final
decision. Westerners may mistakenly assume that this manager is the ‘key decision maker’ in an orga-
nization, while in reality such a role usually does not exist at all. The process the Japanese use to reach
decisions involves many stakeholders who establish consensus through a series of deliberations. Since
uncertainty and change cause distress in Japanese culture, they will go over your proposal in painstaking
detail, dissecting every sentence and asking for more detail until they understand the exact meaning.
Many factors that affect their decision are carefully analyzed, considered, and discussed along the way.
In addition, the exact impact of a change on everyone in the group and beyond is analyzed as part of the
group consensus process. This can take a very long time and requires a great deal of patience. To influ-
ence the decision process, build strong relationships with as many of the stakeholders as you possibly
can. The role of the senior leaders is to orchestrate the process, help establish consensus, and formulate
the ultimate decision.

When making decisions, businesspeople in the country usually consider the specific situation rather
than applying universal principles. Personal feelings and experiences may weigh more strongly than
empirical evidence, but they will also consider and analyze objective facts. The Japanese are often very
reluctant to take risks or make changes. If you expect them to support a risky decision, you need to find
ways for them to reduce the risk first.

Agreements and Contracts

Written meeting protocols are frequently used. They may get signed by both sides to indicate agreement.
Their purpose is to ensure error-proof communication, not to introduce any legalities. If time ran out,
then a follow up e-mail should be sent quickly after the meeting by one of the parties, asking the other
side to confirm or modify. Make sure to put every important assumption you are making into that pro-
tocol to avoid surprises down the road.

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The way the Japanese communicate agreement is by clearly stating all terms and conditions they agree
with. An agreement exists only if both parties have done this, so do not simply respond with ‘yes’ instead
of following this approach. Agreements may be acknowledged by nods or slight bows rather than hand-
shakes. Do not pressure the Japanese into signing contracts.

If used at all, written contracts are normally kept high-level, capturing only the primary aspects, terms,
and conditions of the agreement. The Japanese believe that the primary strength of an agreement lies
in the partners’ commitment rather than in its written documentation. Carefully explain and document
confidentiality agreements. However, the Japanese may still distribute information within their compa-
ny even when you are trying to restrict this.

Using a local attorney, rather than a western one, is viewed favorably. Their primary role is to function
as notaries. Lawsuits are extremely rare in Japan, and filing one will likely destroy your business rela-
tionship for good.

Signed contracts will be honored. However, the Japanese do not view them as final agreements since
their expectation is that both sides remain flexible if conditions change, which may include agreeing to
modify contract terms.

Women in Business

Japan is still a strictly male-dominated society, and while roles have started to change some, the concept
of gender equality is foreign to the country. Some companies retain very traditional views while others
try to be more accommodating to women. Many women do not work, though, and those who do still
have little opportunity to attain positions of similar income and authority as men.

Japanese men who have not been abroad may not be used to dealing with women in business settings.
The most promising way to overcome this is to make a concentrated effort to demonstrate skills and pro-
fessional competence. As a visiting businesswoman, emphasize your company’s importance and your
role in it. A personal introduction or at least a letter of support from a senior executive within your com-
pany may also help. In addition, dress very conservatively and professionally.

Most Japanese men are not accustomed to working with business women. This creates advantages and
disadvantages. A business woman will probably be treated better and get more information, since that
is the polite way to treat a female guest. Social situations present a challenge to both sides, though.
Japanese men are usually unaccustomed to socializing with women on an equal level. Female business
travelers cannot participate in the same way as men can in the Karaoke sessions or golfing events. They
should exercise caution and act professionally in business and social situations. Displaying confidence
and assertiveness can be advantageous, but being overly aggressive could create major issues.

Other Important Things to Know

Formal, conservative attire is important when doing business here. Male business visitors should wear
dark suits with neckties on most occasions.

Business meals and entertainment, in particular dinners, Karaoke evenings, and other evening events
that may include heavy alcohol consumption are very important as they help advance the vital process
of building strong relationships. Refusing to participate in these activities could be taken as a clear sig-
nal that you are not seriously interested in doing business with your counterparts. Although these are
primarily social functions, business is often discussed informally in smaller groups, many times one-
on-one. Your Japanese counterparts may use these discussions as opportunities to convey important
messages or resolve disputes. Sometimes they may also try to obtain information from you that could

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strengthen their negotiating position. While you want to remain watchful, deflecting such inquiries if
needed, never show signs of mistrust in your counterparts’ intentions.

Topics to avoid in conversation are Japan’s relationships with South Korea and especially with China.

Gift giving is common in social and business settings in Japan, including initial meetings. If you received
one, it is best to reciprocate with an item of similar value that is typical of your home country. Giving a
gift after signing a contract is also viewed very favorably. Give and accept gifts using both hands. Do not
open gifts in the presence of the giver unless your host did so first. There are numerous potential pitfalls
in what to give and how to wrap it, so prepare upfront or ask someone from the country to avoid causing
embarrassment.

Cigarette smoking is very common in Japan. Do not comment on it, and allow for cigarette breaks during
meetings and negotiation sessions.

Be prepared for work hours that may be extreme even to U.S. standards. Office meetings within the com-
pany may last until well past midnight, and other meetings and conferences between companies may
still go well into the night before the social part begins.

Negotiating International Business (CreateSpace, 2017 edition)

is available from Amazon.com and other bookstores for $29.99. A
reference guide covering 50 countries around the world, the 479-
page book includes an extensive discussion of the negotiation
principles and tactics frequently referred to in this excerpt.
Please recommend this Country Section and others to colleagues who
might find them useful. Country Sections are available individually at

www.leadershipcrossroads.com/NIB

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