Parissa Haghirian - Home

Wednesday, Feb. 24, 2010

Don’t expect an assertive Toyoda,  Congress to see typical humble Japan boss, not take-charge type

 By YURI KAGEYAMA The Associated Press

Read the original article here http://bit.ly/d1QS10

Americans are likely in for a surprise if they expect Toyota President Akio Toyoda to put on a show of authoritative “the-buck-stops-here” clout at Wednesday’s congressional hearing on the automaker’s massive recalls.

In harmony-loving Japan, company heads are rarely management professionals and are picked more to be cheerleaders for the rank-and-file. Toyoda, because of his bloodline as grandson of Toyota Motor Corp.’s founder, was groomed to play that morale-boosting role.

“In a Japanese company, the top man isn’t the one calling the shots. He is looked up to as a symbol, a bit like the Emperor,” says Toyoaki Nishida, a business professor at Chubu University, referring to the Imperial family, which wields no political power. “That’s why Japanese company policies don’t ever change even if presidents change.”

Given such differences in corporate cultures between Japan and the U.S., it wasn’t unusual that Toyoda initially said his U.S. executives were the best people to testify at the House Committee on Oversight and Government Reform on Toyota’s recalls, now reaching 8.5 million vehicles globally for sticky gas pedals, braking glitches and faulty floor mats.

He agreed to go late last week only after getting a formal invitation and as criticism flared, especially in the foreign media, that he should be the one to explain the safety lapses.

In three news conferences this month, Toyoda has stayed true to form as a Japanese president and left the details of the defects and quality measures to another executive. He has focused on sending the message that he is sincere and ready to correct where the esteemed “Toyota Way” of production has gone astray.

Parissa Haghirian, an associate professor of international management at Sophia University in Tokyo, said Japanese firms are group-oriented and generally don’t look to one person to steer them, unlike the West, where executives are hired for ideas and leadership.

Japanese presidents are team leaders who coordinate everyone’s views and care intensely about peer opinion because confrontation must be avoided, she said.

This nation has a special phrase to describe such behind-the-scenes consensus-building, “nemawashi,” which translates as “laying the groundwork.” Neglecting nemawashi is considered a foolish and sure way to walk into failure. Nemawashi is bureaucratic and time-consuming, but once a decision is made everyone is on the same page and action proceeds quickly without infighting.

“There is usually no strong leader who can push radical change within a Japanese firm,” Haghirian said. “In the meetings I have seen, members would rather wait a bit longer, see what happens and then have another meeting instead of taking action right away.”

Japanese managers build their careers by moving up within the company. Job-hopping isn’t as common as in the U.S., and it is unusual for top executives to be recruited from outside the company. That makes for insular management that may be clueless about what’s happening outside their companies, she said.

At Nissan Motor Co., it took a foreigner, Carlos Ghosn, a Brazilian-born Frenchman of Lebanese ancestry who arrived in 1999, to slash jobs, get rid of money-losing units and save the automaker from bankruptcy - a task no Japanese president at the carmaker had dared to tackle.

“A Japanese company president has to seek consensus through patient meetings, gentle and shrewd nemawashi, and all sorts of very subtle backroom dealings and such,” said Roland Kelts, a lecturer at the University of Tokyo. “It’s a much greater, more sophisticated and complex balancing act.”

Toyoda is relatively cosmopolitan - for a Japanese president.

But his lack of English fluency is the norm among even well-educated Japanese, including those hailing from top universities like Keio University, Toyoda’s alma mater.

Admission at such universities call for intensive study, but conversational English isn’t one of the requirements. English courses tend to be pedantic, focusing on grammatical rules, and starting foreign-language lessons in childhood is rare.

Toyoda, who has a business degree from Babson College in Massachusetts, has no problems reading an English statement, but his halting English at news conferences indicates he will struggle to improvise answers when faced with a grilling from lawmakers.

In another telling contrast of corporate cultures, Japanese chief executives are also paid far less than their American counterparts.

At last year’s shareholders meeting, Toyota disclosed the overall tally of ¥1.6 trillion paid to 33 board members - about ¥48 million each. Compensation disclosure regulations aren’t as tight in Japan as in the U.S., and companies aren’t required to break down what each director made.

The average figure for Toyota directors is only slightly higher than the average for Japanese companies calculated by Sanro Research Institute at ¥36 million.

By contrast, Ford Motor Co. Chief Executive Alan Mulally’s compensation in 2008 was valued at $17.7 million, including stock options and other perks.

Stock options are limited in Japan, though presidents do get chauffeur-driven limousines, expense accounts and sometimes private jets.

Toyoda, however, is widely viewed as having more at stake than the average Japanese president. He owns more than 4.5 million shares in Toyota, largely inherited from his family, though that is less than 1 percent of all Toyota shares. Toyota dividends last year were ¥100 a share.

Toyoda has shown another difference: He has apologized to customers for inconvenience and worries, but only bowed in a routine greeting, not in ceremonial apology.

Kabukiesque atonement for Japanese company heads typically comes as a deep bow held for several seconds to show heartfelt remorse for wrongdoing. The president may then announce he is stepping down in symbolic “hara-kiri” to be replaced by another equally symbolic president.

Some Japanese crisis-management experts criticized Toyoda for neglecting protocol by dispensing with the humble bow. What awaits in Congress could be far more testing.

“Unless he goes extremely prepared, American people are going to wonder what he is doing if he approaches this as though he is addressing Japanese people,” said Nishida, the business professor. “He didn’t claw his way to the top. He was just placed on a pedestal. He became president in the most unfortunate of situations in the most unfortunate of times.”

Find the podcast on Japanese decision making processes here

http://bit.ly/bpRVC4

This month I will start to publish my students papers on cross-cultural encounters. My students write about a cross-cultural incident, which helped them understand a foreign culture better. The material can be used freely for educational purposes.

The incident is written by Mai Kaneshiro and describes her first overnight stay at a Western friend`s house.

Visiting my Australian Friend´s House

By Mai Kaneshiro

Keywords

Individualism versus Collectivism, Receiving guests in Japan and in a Western country, Japanese student in Austrialian Home

 My name is Mai Kaneshiro, and I grew up in a small city called the Gold Coast, in Australia. At school, all of my friends were Australian, and I was basically the only Japanese in my year level. Nonetheless, I really got along well with them all, and felt no different to any of them, except for my race.

The cross-cultural incident that most sticks in my mind happened when I first went to an Australian friend’s house for a sleepover. I was thirteen. Before I went to my friend’s house, I had imagined that I would be welcomed by my friend’s family in the same way that my mother treated my friends when they came over to my house. For example, if visitors come to our house for a night stay, my mother would treat the guests with the best hospitality-cleaning the room beforehand; preparing a great breakfast, lunch, and dinner; making the bed, etc. But this was not at all how I was treated at my Australian friend’s house.

When I was welcomed to the house, the first thing I was told by my friend’s mother was to “use the house as if it is your home.” At first, I was really delighted by this, and I felt warmly accepted into the house. However, it was not until later that I really understood the meaning of her words.

As I entered, I noticed the difference from our house straight away. The room was dirty (it didn’t seem as if any cleaning had been done before I came) and my friend’s father was lying on the couch, wearing only shorts, and watching TV. In my house, there was no way my mother would allow any visitors to enter when it was dirty, and my father would definitely not be seen in such laid-back clothes when we had a guest. At that point, though, the disorganized room did not concern me much, because I just thought that her family must have been busy-however, I was embarrassed to see her father dressed like that.

            But what surprised me most was the dinner my friend’s mother prepared. Arranged on the table were bread, butter, pineapples (from a can), salami (not homemade), and instant soup. My friend, sitting beside me, was eating with delight; but the food left me honestly wordless. My mum would always make everything from scratch, and, if we had a visitor, she would make an especially extravagant dinner. The poorly made meal made me think, at first, that maybe my friend’s parents didn’t like me. But when I saw the rest of her family eating contently, I realized that this meal was normal for them. Even though I felt unsatisfied, I ate the whole meal to show respect for my friend’s mother. But, still, I could not help but think how unhealthy and simple the meal was.

            My friend and I cleaned up afterwards, and it was time for us to get ready for bed. But here again something concerned me: my friend’s room was as dirty as a pigsty, and there was no mattress, blanket, nor pillow-nothing, basically, for me to sleep on. So I went courteously to my friend’s mum and asked if there was anything I could sleep on, and she replied, “Of course there is! Why didn’t you find it for yourself! Just open up those cardboards and I’m sure you can find everything you need!”

“Alright . . . ,” I thought to myself, thinking that this was what she really meant by “use the house as if it is yours.” My mum hated it if visitors opened any cupboard, drawers, or the wardrobe, so she always made sure they had everything they needed herself. So I was really surprised that my friend’s mother left those things for me to do on my own, truly allowing me to do anything in the house. After that, I found everything I needed to sleep on, and made space in my friend’s room so I could set up the bed.

The next morning, my friend and I woke up at 8:30. There was no breakfast ready: instead, we were told to make our own breakfast. On hearing that, I was yet again in shock, because when I had invited my friends to my house, my mum had prepared a deluxe breakfast, such as fruit salads, French toast, bacon, scrambled eggs, and many drinks to choose from. But obviously it wasn’t like that here. So we ended up making scrambled eggs and toast together, which was rather simple but which I actually found quite enjoyable-my mother never allowed me to use the kitchen on my own because it is dangerous.

These were the things that I found most different from my culture when inviting people over. I remember that I was really surprised and astonished at the difference in the way Australian people treat their daughter’s/son’s friends when they come over. My first sleepover at my friend’s place was honestly distressing and astonishing: I felt so “cheap,” to be there and not to receive the hospitality I had expected. But as I grew older and came to be more familiar with the Australian culture, I noticed the way my perspectives changed. Now, I can definitely say that I would feel more comfortable going to a house where the parents left everything up to us, and for them to be their usual selves: this is because I would feel relieved to know that I’m not causing any annoyance. The reason I came to feel this way is by comparing it with my mother. Of course my mum shows better hospitality, and makes it seem like she is happy to have guests over; but I know that she gets tired from working so hard to make them feel welcomed. Also, my friends once told me that they feel like an outcast when they come over to my house, because they get treated differently: with too much care.

What I learnt from this cross-cultural experience is that it is really important to understand different cultures, and know how they think-because what you may be doing to make them feel better may actually be making them feel uncomfortable (just like my friends felt with my mum’s hospitality). It may be better to recognize their cultural background before inviting them over: in this way, we can avoid disappointing people. For example, if a Japanese guest comes over, treat them in Japanese style; but if the guest is a Westerner it may be better to treat them like they are part of your family, and do nothing particularly special.

© Mai Kaneshiro, 2009

 Download the article here

visiting-my-australian-friends-house-by-mai-kaneshiro

Tokyo`s New Marketing Trends

By Dr. Parissa Haghirian and Paul Gaspari

In the Western discussion of Japanese management, two topics are dominant: the production management of Toyota and lifetime employment as well as other particular aspects of Japanese human resource management. One aspect of Japanese management which has never hit Western media or scholarly research journals is Japanese marketing.
It is not quite clear why marketing in Japan has never created any interest in the West. Maybe cultural differences are perceived to be too large. However, Japanese marketing strategies are definitely an issue worth investigating. All of us living and working here in Japan are quite amazed and amused by the advertising and media campaigns of Japanese firms.
But Japan and foremost Tokyo is in some sense the marketing capital of the world. No other business location is as competitive or evolving within such a limited geographic area. There are more than a million enterprises and 160,000 restaurants in Tokyo alone, competing for the attention of around 35 million consumers. Trends therefore come and go on a weekly basis.
Japanese companies have to stand out in order to create attention and keep consumers interested. To do this, companies either need to follow an ongoing trend right away or start one for themselves. Tokyo has therefore become a very innovative and evolving marketing laboratory of sorts.

Brands in Japan are reinventing themselves

Japanese consumers love brands and Japan is said to be the world`s only luxury mass market. The most favorite brand of all is long-time seller Louis Vuitton. Almost half of all Japanese women are said to have at least one item of the expensive brand.
However, Japanese brand consumers are not brand loyal. Once a brand becomes “uncool” or does not offer the expected value anymore, consumers easily switch to a competitive brand. And in a market where everybody likes and buys expensive brands, marketers of luxury goods face a unique challenge. How can brands stay exclusive, if everybody buys them. In order to combat this problem, Japanese brand managers have developed a number of ideas to keep their brands attractive and the talk of the town.
Leading again here in this area is Louis Vuitton. The company opened its first concept store in Tokyo, in cooperation with the Seibu Department store chain. Louis Vuitton Underground in Ikebukuro presents LV products in a rather unusual environment. The store interior is designed to mirror an actual construction site. Other brands have entered a completely new field: the service industry. Bulgari on Omotesando is serving food and offers hand-made chocolate with Italian flavors. Real Bulgari fans can even take a sojourn at a Bulgari resort in Bali. Furla, the Italian leather manufacturer, also offers coffee at its Ginza shop and invites customers to Furla Yoga in Aoyama. Chanel teamed-up with France`s chef Alain Ducasse to give Chanel customers the chance to wine and dine in an exclusive restaurant on top of the Chanel building.
Brands represent their customers` lifestyle. The overall brand experience is enriched by these new activities and ideas. Customers can now feel and experience the brand with all of their senses. This is improving brand loyalty and gives many traditional brands a new, cooler and younger image.

Consumers Involved in Product Design

Consumers are increasingly interested in customized and individualized products. Business models, which help customers to design their own products, are booming. As consumers are seeking out more unique and personalized products, they are also interested in customizing the products they buy. Bling Me, a company which helps customers to personalize their mobile phones, bicycles, etc. with shiny stones, has even based their business model on the wishes of customers to create their own products. Some brands even go a step further and include customers in their product design processes. Soup manufacturer Maruchan and beverage company Calpis even let their consumers vote on their favorite flavors each year.
Integrating customers in product development processes comes with rewards. Customers feel more attached to the products and show more interest in the overall brand. The company meanwhile can create greater customer feedback and launch campaigns that specifically target their customers` wishes and ideas.

Social Networks go offline - consumers do not like to be alone any longer

As in every major city, Tokyo has a growing number of customers who live alone. The number of single households or households without children in Tokyo has steadily increased over the past several years. People are increasingly lonely and desire more social interaction and contact with one another.
This request is being answered by Japanese companies that are creating social networking beyond the “classic” internet networks. They are trying to connect consumers in real life. Leading in this field are the numerous Japanese railway companies. Seibu Train Company started their first hiking day a few years ago, and this was soon followed by Tokyo Metro and other major railway lines around the capital. The companies organize guided tours in certain locations for all customers interested. These events are free but have developed a seriously growing fan base.
Another famous example for social networks developed by a company is the sports good producer Asics. The company is famous for sponsoring the Tokyo sightseeing run, which covers all major sights of Tokyo in a 15 km run. Other runs target women, beginners, and early morning runners, and are offered every day. Again, all of these events are free of charge, but its evident that consumers become avid fans of them and eventually of the companies offering them.
Social meetings of consumers also support difficult purchase decisions. Tokyo real estate developers for instance offer seminars for women (their new target group) who plan to buy apartments. These seminars allow potential buyers to meet each other and often lead to more positive purchase decisions in the end.
Connecting consumers has a positive effect on company’s long-term strategy. Consumers become fans of the brand which in turn will positively influence their purchasing decisions in the future.

Simplifying Product Choices

Tokyo is the biggest market in the world overflowing with offers and new products. But also in other places around the world, the number and speed of new products being introduced is dramatically increasing. More and more consumers find it difficult to make purchase decisions, simply because they are worried about buying the wrong product or to miss a bargain they have not discovered yet. These overwhelmed consumers tend to buy products later or not to buy them at all. This is a trend not only in Tokyo, but in most industrialized countries. Shoppers are feeling increasingly out of the loop when it comes to new products and the advanced technologies that often accompany them.
The Japanese have realized this buyer dilemma and started developing products or business models supporting customers in making quick and simple purchase decisions. KDDI, for example, introduced the Kantan Keitai, a mobile phone that strips away all the complicated and high-tech gadgets that are the standard for most Japanese mobile phones these days. The company`s target group are consumers who want to simply buy and use the talk feature of a mobile phone.
Simple and low risk product choices are the base of Ranking-Rankqueen`s business model. The company targets consumers, who might shy away from buying simply because the choice of potential products is too massive. Based on the bestseller of its parent company, the Tokyu department store chain, Ranking-Rankqueen produces a ranking of the most popular products each week. The hit products in each category are announced in the shops and consumers do not have to think about which product is the best. The concept has already been copied by big retail chains, which also started to point out their bestselling products. This lowers customers` risks of buying a product that might turn out to be wrong or of low quality. Customers show higher satisfaction with their purchases and place greater trust in the company.
These trends are only a few that can be discovered in Tokyo every single day. Tokyo, being the biggest marketing capital of the world, offers a wide variety of innovative marketing techniques and strategies that are constantly evolving due to high competition. Tokyo’s consumer groups represent the future of all industrialized societies. Baby Boomers, singles and overwhelmed consumers are increasing around the world. The way Tokyo caters to these groups and adapts products to them are a lesson for other advanced nations.
As knowledge about the marketing innovation currently being done in Japan becomes more widespread, Japanese marketing may become the new focus in Japanese management study over the next couple of years.

Author Information

Dr. Parissa Haghirian is an Associate Professor of International Management at the Faculty of Liberal Arts at Sophia University in Tokyo. She is the editor of “J-Management; Fresh Perspectives of the Japanese Firm in the 21st Century.” www.parissahaghirian.com

Paul Gaspari is a Master Student in International Business and Development at the Faculty of Liberal Arts at Sophia University in Tokyo. He is doing his research on Foreign Entrepreneurs in Japan. www.paulgaspari.com

Today Naked Communications, a British advertising agency visited our faculty and presented their firm to the students. A great evening, we learned a lot about how to market using modern media and super creative ideas.

Thank you Kaz and Yosuke for this inspiring presentation.

More information on the firm at www.nakedcomms.com and here are the pictures.

As every year I took my students to Gifu-ken to experience Japanese lifestyle and visit a Toyota plant near Nagoya.

Here are the pictures.

Sophia University Toyota Tour 2009