Getting down to business in east Asia

Sunday Business Post - Recruitment - May 13 2007

Gaining skills and knowledge about the local market, customs and business processes is a key to success for any Irish organisations considering doing business in east Asian markets, said Mary Mooney, international business executive with Chambers Ireland.

“Today Japan and Korea are among the world’s largest economies and many Irish companies are investing heavily in providing staff with language lessons and providing cultural sensitivity training to address issues such as etiquette, protocol, communication styles and negotiation approaches,” she said. “In a competitive world businesses appreciate that greater cultural sensitivity will assist them in forging longer and more prosperous relationships.”

Mooney said that there are many observable and more subtle differences between internal structures and processes in Irish and Japanese organisations. Rituals and protocols such as bowing, presentation of business cards, sitting in the correct position around a meeting room table and wearing the appropriate forms of dress are all very important, while being able to read highly formalised non-verbal communication can just as useful.

"In Japan they would very rarely say no to a business proposal,” she said. “So it is very important to read the signals before investing a lot of time and effort into pursuing business."



Mooney said that Irish organisations setting up operations in Japan should be aware of the different management and human resources practices that are unique to that market.

"The emphasis placed on seniority in the workplace is one unique characteristic of the Japanese labour market,” she said. “Japan's strong belief in authority and the chain of command has led to a well-established hierarchy in Japanese companies, where senior staff members are accorded the greatest respect and deference.”

Mooney said that recruitment was another area where Irish organisations needed to be aware of the local cultural practices. In Japan career paths are typically very rigid and workers are often recruited straight from university and remain with one company until retirement. Mooney said that this can pose problems for foreign organisations trying to source new staff.

“Most foreign companies rely on temporary staffing, mid-career hiring, overseas Japanese returnees and expatriates to fill their positions,” said Mooney.

The decision making process within Japanese organisations impacts on the particular skills and attributes that Japanese executives have compared to their Irish counterparts.

“The Japanese corporate hierarchy, along with a strong tradition of group consensus, has had a significant impact on the skills that employees acquire,” said Mooney. “Mid-career managers are typically only allowed to make decisions on routine matters, and often make these decisions as part of a large group. Forty-year-old Japanese managers do not have as much decision-making experience as Western managers of similar age.”

She said that Japanese nationals returning home after they have worked abroad are often particularly suited to the requirements of overseas operators with offices in Japan.

“These individuals, many of whom are in their late 20s or early to mid-30s, are often well trained and highly motivated,” she said.

“They have Japanese roots and some Western business and cultural experience, and many (particularly women) believe that they will have a difficult time re-adjusting to the highly formalized Japanese way of doing business.”

Given these differences, Irish organisations and individuals are advised to gain relevant skills and knowledge before entering into business relationships or setting up operations in East Asia.

Chambers Ireland are currently promoting a programme which aims to assist organisations that are presently involved in the Japanese or South Korean markets.

The year long Executive Training Programme (ETP) provides intensive cultural and language training to European executives, including three months of intensive seminars at European universities, six months tuition at a university in Tokyo or Seoul, and a final three month placement with a local company where the participant can practice their new language skills and gain first hand experience of Japanese or Korean business and management processes on the ground.

"The ETP programme aims to accelerate the career objectives of executives operating in the Japanese or Korean marketplaces through its mix of blended learning and secondment," said Mooney.

The ETP is funded and managed by the European Commission. There are no tuition or participation fees and each participant receives a €24,000 scholarship. The closing date for applications for the ETP programme beginning this November is May 15th.

Courses on the ETP scheme range from Japanese or Korean language training and familiarisation with Japanese or Korean culture and customs to practical business simulations. Elective options include Organisational Structure and Communications and Human Resource Management and Personnel Policy modules.

Dr Liming Wang, director of the Irish Institute for Chinese Studies at University College Dublin, said that Irish organisations considering forming relationships with Chinese counterparts should also arm themselves with some local understanding.

"Any Irish firm in the Chinese market should have at least some knowledge of the Chinese system,” he said. “Some basic Chinese cultural understanding is a vital component to help you do business with Chinese people.”

The Confucius Institute for Ireland at University College Dublin (UCD) oversees a range of short courses aimed at those interested in China for business, diplomatic or recreational purposes. From June 2007 it plans to run a free seminar series, at the Quinn School of Business at the UCD Belfield campus, aimed at Irish managers or organisations. This course will provide general information about the economy in China, as well as market trends there, organisational culture, management systems and legal issues relevant to enterprises.

"Within this public lecture series we try to give as much as possible an idea of how to do business in China,” said Dr Wang. “There will be not only theoretical lectures but also talks from people with practical experience of working in China."