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Tuesday, June 27, 2000

Your most valuable briefing paper

Staff writer
DOING BUSINESS WITH THE NEW JAPAN, by James Day Hodgson, Yoshihiro Sano and John L. Graham. Rowman & Littlefield, 2000, 230 pp., $27.95 (cloth).

Do we really need another book about doing business in Japan? Probably not -- and not even if this is a "new Japan" or a new era in international capitalism.

That said, buy this book. The title isn't exactly accurate anyway. There is precious little in it about "the new Japan." That isn't too surprising since this is a revised edition of "Smart Bargaining: Doing Business with the Japanese," which was first published in 1989, and the meat of the material seems to come from the original. And finally, the authors implicitly argue that essential elements of Japanese negotiating behavior are fundamental and unchanging, which is the antithesis of "a new Japan."

Still, anyone doing business in Japan would do well to pick up a copy. Even visitors should read the chapters that try to capture -- in broad strokes of course -- Japanese culture and society.

"Doing Business with the New Japan" reads like two books. One consists of the recollections of former U.S. Ambassador to Japan James Day Hodgson. Hodgson served from 1974 to 1977; before that he was the U.S. secretary of labor. He writes well and tells good stories. (Meeting Secretary of State Henry Kissinger before taking up his post, he was warned: "Don't expect answers. Only proverbs." Kissinger's advice was right on, as Hodgson's other tales confirm.)

He tells of business negotiations that go astray, encounters with government officials that confirm every stereotype and he shares the wisdom that he has accumulated. While those incidents drive home the same points as the other chapters, they "feel" different and provide a nice counterpoint to the business-school approach of the other material.

"Book Two" is that other material. Yoshihiro Sano is a business consultant; John Graham is a professor at the University of California, Irvine, graduate school of business. Their chapters focus on negotiating behavior, and they contain a wealth of invaluable material, from who to put on your team to the gifts to give when meeting counterparts. It is this level of detail that makes the book so valuable and distinguishes it from other books on the shelves.

Sano and Graham urge American negotiators to shed the "John Wayne" mentality that typifies U.S. businessmen -- yes, men -- abroad. Going it alone is an invitation to trouble. There is just no way a single individual can match entire teams of negotiators sitting across the table. Teams can be more flexible, have more strengths and have tactical advantages, such as multiple channels for communication.

Similarly, the informality that Americans prefer doesn't work in a society like Japan that is rigidly structured and based on formal relationships. It takes time to build a relationship; attempts to jump-start the process will backfire.

Patience is key. The authors counsel negotiators to go slow and expect delays -- they even suggest creating them. Taking time out for "checking with the home office" can be a winning strategy during negotiations. Get comfortable with silence: Don't rush to fill every hole in a conversation. Don't lay your cards on the table and don't refuse to take no for an answer.

Much of the advice will sound familiar. Prepare well -- and then prepare some more. Play for the long term. Be sensitive to nuances, especially that ever elusive "no." (In one nice table, they list the 16 ways the Japanese avoid saying no.)

There is the laundry list of concepts -- "amae" (indulgent dependency), "nemawashi" (preparing the roots), "ringi-kessai" (decision-making by consensus), "shinyo" (gut feeling), "wa" -- found in almost every book of this type.

But the pointers make a huge difference. Consider these suggestions: Keep a tally of all questions asked by the Japanese negotiators. Make a comprehensive list of negotiating instructions. For that matter, try to script almost every encounter. Leave as little to chance as possible. Make sure that the conversation is appropriate. There is a time for business and a time for exploring the relationship.

As they explain, "top Japanese executives may be included in initial meetings or at an intermediate stage to communicate the importance of the deal. But in neither case do they participate in substantive business talks. They have neither the knowledge of details nor the willingness to make a decision without consultation."

Don't focus on English-speakers. They are rarely decision-makers (if there is such a beast) and their ease with foreign ways can create a false sense of security.

One of the most valuable tips concerns the use of "nontask sounding." This is communication that is designed to help build a relationship between the two parties. The advice is pretty simple: Shut up. Business talk is inappropriate at this time. "The Japanese will be looking for integrity, sincerity, a cooperative attitude and wa. Economics will come later."

Another especially useful tack is to open informal channels of communication. "Your lowest-level bargainer should be assigned the task of establishing a relationship of trust with an operational-level manager on the Japanese side during the nontask-sounding activities. . . . time should be spent after hours nurturing this relationship. . . . The Japanese side will also be looking to open such a channel of communication and the American side should be alert for such overtures."

This allows both sides to talk freely, irons out the wrinkles, permits the upper-level negotiators to avoid losing face and preserves wa. "This may seem a monumental waste of time to an American, but we have learned through experience that negotiations with Japanese proceed smoothly when this informal channel of communications is managed properly."

"Doing Business with the New Japan" makes heavy use of that experience. Use it.

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