2015Cambridge Business & Economics ConferenceISBN : 9780974211428
Culture and Ethics: A comparison Between Japan & the USA
Gary Nobles, University of Texas at Dallas
ABSTRACT
Purpose
The purpose of this paper is to examine the reasons for differences and similarities between Japan and the United States on their ethics, cultures, and business practices. This article will attempt to give the reader insight into the way ethical decisions are made in each country by determining the impact that culture and ethics have on the way business is done in each market. This research paper will also attempt to help the reader understand ways to improve their performance as an expatriate.
Method
The data from this article was collected from articles examining Hofstede’s cultural dimensions, as well as other articles detailing international business relations between the United States and Japan. An analysis of the laws in each country and how they came to be was also used to formulate the opinion of the author.
Findings
In writing this article, it has become apparent that long set in traditions are key in many Japanese business settings and that these traditions greatly influence the way business is conducted. Understanding these traditions and their reason for existence while being able to adapt to changing situations and unfamiliar territory is key in becoming a successful expatriate or when working with others from around the world.A firm grasp of the knowledge of the culture in which you are trying to conduct business will help one to understand the impact that culture has on any one individual's ethical decision-making process, which is key in understanding the motives behind those decisions and formulating an appropriate response.
Value
This article creates value through the understanding of the culture and ethics between the United Statesand Japan. Through this research, I attempt to demonstrate the importance of cultural differences and ethics pertaining to business interaction across different countries and cultures.
INTRODUCTION
“The greatest victory is that which requires no battle.”(Sun Tzu, 1910) Becoming victorious in business in the modern world is no longer a matter of highest sales, lowest costs or most diverse products, rather it depends on understanding one’s competition in such a way that one can predict their moves and react accordingly. In order to be able to do this, one must understand the reasons behind, and the thought processes behind, the decisions that are made. This becomes even more important in our era of globalization. Companies are no longer restricted by the boundaries of their country of origin. This presents many unique opportunities for businesses worldwide. However, in order to be successful and capitalize on these opportunities, one must understand who it is one is working with and what factors contribute to their decision-making processes.
This paper attempts to analyze the ethical differences as well as the cultural differences and similarities between the United States and the global economic powerhouse that is the small nation of Japan.Japan was chosen to compare and contrast with the United States because of its strong cultural ideologies and long set in traditions. Japan and the United States are also very different which could lead to greater than normal errors in decision making when working as an expatriate. Geographically, Japan is relatively small compared to the United States yet they are still very economically stable and a clear economic leader in the region.
LITERATURE REVIEW
Hofstede
Geert Hofstede, a social psychologist, wrote a book in 1980 called Culture's Consequences that dealt with values across nations and cultures. He was able to come up with four cultural dimensions that countries, rather than individuals, were statistically grouped together in. The four dimensions describe how nations as a whole dealt with inequality, uncertainty, intergroup relations, and gender roles. (Hofstede, 1980)The Chinese Culture Connection in 1987, along with Hofstede and Bond in 1984, found another dimension of culture variation that dealt with a culture's orientation towards future rewards such as promotion of cooperation and harmony for the good of all men. (Chinese Culture Connection, 1987)(Hofstede & Bond, 1984)Although this dimension has been accepted by Hofstede as significant, research on the subject was not included in this analysis.
Hofstede's first cultural dimension is referred to as power distance. In 2001, Hofstede states that power distance "is the extent to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally. (Hofstede, 2001) This scale suggests that a society's level of inequality is endorsed by the followers as much as by the leaders and it is worth noting that Hofstede qualifies this by saying "all societies are unequal, but some are more unequal than others". (Hofstede, 2001) Through his research on the subject, Zaid Swaidan says "Individuals with larger power distance accept the inequality of power in their society." He also states his hypothesis on power distance by saying those who score low on the power distance scale reject unethical, questionable activities more than those who score high on the same scale. (Swaidan, 2012)
Another scale in Hofstede's cultural dimensions is uncertainty avoidance. He describes it as a society's tolerance for uncertainty and ambiguity and it is indicative of the extent a culture will go to minimize the possibility of uncertain situations through strict laws and rules. (Hofstede, 2001) In a study in 1993, Stohl describes Hofstede's uncertainty avoidance dimension as the extent to which people are made nervous by situations they consider to be unstructured or unpredictable and the extent to which they try to avoid these situations by adopting strict codes of behavior. (Stohl, 1993)Hofstede also mentions that people in uncertainty avoiding countries are more emotional and motivated by inner nervous energy. Those in uncertainty accepting cultures are more tolerant of opinions different from what they are used to and that they try to have as few rules as possible. These cultures are more phlegmatic and contemplative, and not expected by their environment to express emotions. (Hofstede, 2001) In his research, Swaidan hypothesizes that those who score high on the uncertainty avoidance scale will reject unethical behavior more than those who score low on the same scale. (Swaidan, 2012)
Hofstede writes about individualism and collectivism as one of the important dimensions of culture and states that individualism stands for a society in which everyone is expected to look after themselves and their immediate family only. Collectivism is the opposite in that people from birth onwards are integrated into cohesive groups which continue to protect them throughout their lifetime in exchange for unquestioning loyalty. (Hofstede, 2001) Swaidan expands on this notion of being born in to cohesive groups. He states that although the group invades the private life of individuals, the group provides protection, loyalty, and security for members and that this collectivist culture tends to emphasize mutual obligations, and concern for the needs of the group before those of oneself. (Swaidan, 2012) He notes that "collectivist cultures are shame-based, are tradition bound, and have stronger moral obligations to their families and societies than individualist cultures" (Swaidan, 2012) and that "individuals with high scores on the collectivism dimension have an emotional dependence on the group" while the "collectivist's identity is based on the social system rather than on the self." (Swaidan, 2012)
On individualistic cultures, Swaidan says, "Individualists value personal independence, pleasure, individual expression, and personal time. They tend to believe that personal goals and interests are more important than group interests. Individualists tend to have a high need for personal achievements and value individual rights." He goes on to hypothesize that those who score high on the collectivism scale will reject unethical, questionable activities more than those who score high on the same scale. (Swaidan, 2012)
Rebecca Merkin states that the MF dimension refers to the dominant sex-role patterns in societies. "Just as male communication is oriented towards status and power; masculine cultures emphasize competition and strength." (Merkin, 2005) Swaidan agrees when he writes “Masculinity stands for a society in which gender roles are clearly distinct; males are supposed to be assertive, tough, and focused on material success; females are supposed to be more modest, tender, and concerned with the quality of life." (Swaidan, 2012) Hofstede characterizes masculine individuals as assertive, aggressive, ambitious, competitive, and oriented towards money and material objects. In contrast, feminine individuals are modest, humble, and nurturing." Hofstede also mentions that "the gap between the values of women and men is very large in masculine cultures and small in feminine cultures." (Hofstede, 1980) Swaidan also considers the ethical implications of masculinity and how it affects ethically acceptable behavior. He states that "One problem is that assertive, masculine consumers might be more tolerant of questionable, aggressive behavior than feminine individuals. Some of the most frequently cited reasons for unethical behaviors were greed and competitiveness, traits that are characteristics of masculine individuals. Importance given to achievement and higher earnings by masculine consumers could result in these values dominating consumers' ethical decision process." (Swaidan, 2012)Swaidan hypothesizes that those who score lower in masculinity will reject unethical, questionable activities more than those who score high on the same scale. (Swaidan, 2012)
Current research has found that consumers who are higher in collectivism, higher in uncertainty avoidance, lower in masculinity, and lower in power distance will behave more ethically than those who are lower in collectivism, lower in uncertainty avoidance, higher in masculinity, and higher in power distance.(Swaidan, 2012) According to Hofstede, relative to The United States, Japan is higher in collectivism, higher in uncertainty avoidance, higher in masculinity, and higher in power distance. Both countries exhibit two of the ethically favorable traits and two of the less favorable ethical traits. In a study by Ryh-song Yeh that explores possible omitted dimensions in Hofstede's study, Yeh also confirms that the Americans have relatively low power distance scale than the Japanese. (Yeh, 1988)
Japan
"Negotiating with the Japanese has not been easy for Americans, partly because we do not fully understand the language, culture, and society of the Japanese people…" (Wechselblatt & Lansing, 1983)
The Japanese people remained relatively isolated from the rest of the world for a very long period of time. The overwhelming majority of Japanese belong to a single ethnic group. This created anidentity that is very unique from the rest of the world. “Japanese culture is an amalgamation of Buddhism, Confucianism, Shintoism, and the Western way of thought.” (Tsalikis & Seaton, 2008)The Japanese, by and large, are still unique and relatively isolated. The indigenous religion of the Japanese people is called Shinto, and focuses on ritualistic practices that are diligently carried out. These practices establish a connection between modern and ancient Japanese. This group cohesion through religion helped to form a Japanese culture that is as unique as the history through which the country was formed.“In addition, Japan is deeply rooted in Confucian teachings and ideology affecting every aspect of life including the way business is conducted.” (Miles, 2006)Authors Paul Lansing and Marlene Wechselblatt (Wechselblatt & Lansing, 1983)describe the Japanese society by saying,"The psychological basis of society in Japan became the group, not the individual during the feudal period..." known in Japanese as the Tokugawaperiod. “This concept is based on the Confucian ideal of the importance of the family within society.... The individual per se is unimportant; it is the group to which he belongs and his position in the hierarchy that must be recognized."(Wechselblatt & Lansing, 1983) Others also argued that as a result of Confucianism, the primary difference between Western and Eastern cultures is “the relative focus on the good of the group in the East and the good of the individual in the West.”(Ralston, Holt, Terpstra, & Kai-cheng, 1997)Lilian Miles says, “Traditional Confucian beliefs have influenced and shaped every aspect of the lives of their population, including the way business relationships are handled and companies are managed.” (Miles, 2006)
It is important to note that the way in which laws, and consequently ethical norms for business and society, are created in a country have strong ties to the cultural needs within that society. Confucians believe that “the basis of a stable, unified, and lasting social order is through living according to civilized and cultured principles developed through human wisdom, not through the imposition of strict laws on individuals.” (Miles, 2006) Lansing andWechselblatt (Wechselblatt & Lansing, 1983)describe this relationship by stating, "This need for group harmony was not just based on the Confucian ideal of the family and the father-son model of relationships as the basis of social order, but on a yet more fundamental need. Unlike western farming, wet rice cultivation requires cooperation and group effort to plant and harvest. Therefore, group maintenance was not merely an abstract social or ethical ideal; it was an economic necessity since rice was the monetary unit of the time. Maintaining order was the duty of the village head; failure to do so resulted in strict punishment, for failure to keep order met a loss of revenue for his lord. In order to preserve social order, the individual had to recognize and accept his place within society."
During those times, society was essentially divided into four distinct classes; the samurai who enjoyed the most benefits, followed by the farmers, merchants, and theeta,the outcasts of society. Lansing andWechselblatt also note that "The farmers ranked before the merchants because tradition maintained that farmers contributed something to society while merchants were essentially parasites who contributed little but gained a lot."(Wechselblatt & Lansing, 1983) Tsalikis and Seaton reiterate this knowledge and expand it to ethicality through one of the two main tenets of Confucian philosophy which are to focus on the group and the concept of social stratification. (Tsalikis & Seaton, 2008)Social stratification is “a facet of Confucianism in which the ranking of business people at the bottom of society may have an effect on consumers’ perceptions of ethicality.(Tsalikis & Seaton, 2008)
Order in society was very hierarchical, in that one had a sense of duty and loyalty to one's superiors, yet lacked nearly all individual rights. This is reinforced by Miles when she says “Confucian teaching has led to organizations being hierarchical in structure.”(Miles, 2006)“To question the decisions of superiors was to question the entire social order.”(Wechselblatt & Lansing, 1983) Maintenance of the class structure, not the delineation of individual rights was a value; duty, not vindication was expected. (Von Mehren, 1963)The government was seen as a supreme authority that maintained harmony among the people as well as peace.“Confucius advocated a paternalistic government in which the ruler was compassionate and honorable and the subjects respectful and obedient. In addition, the ruler would strive toward moral perfection in order to set a good example to the people.” (Miles, 2006) In the late 1800s, Japan's isolation was ending, and it was time to adopt a new legal and political system. Germany’s legal system was chosen as opposed to the American system because Germany maintained a sense of collectivism while still acknowledging the efficacy of capitalism. The American system was too deeply rooted in individualistic rights for the Japanese to be able to accept it. With the new German system, commercial activity was encouraged. This was a huge break from the traditional Tokugawa period in which merchants were considered parasitic.
Post World War II, following the adoption of a new constitution created to protect civil liberties and promote democracy in Japan by the United States; western legal concepts such as individual rights and due process were introduced during this process of democratization of Japan. (Johnson, 1976)"The purpose of the American occupation was to create a new democratic Japan through laws philosophically based on American concepts of democracy and economic regulation." (Johnson, 1976)“One way in which they are doing this is by basing their corporate governance systems on the Anglo-American governance model.”(Miles, 2006) In 1998, Japan required companies to recruit a substantial proportion of outside/independent directors on to their boards to act as the eyes and ears of shareholders and to bring an element of objectivity into the company and ensure the company is operated in a manner that does not serve the interests of management or controlling shareholders. Under the “Anglo-American” model of corporate governance, directors prioritize shareholder interests above those of all other stakeholders. Miles explains the duties of the directors by saying “Independent directors must be inquisitive and not afraid to ask penetrating questions. They may on occasion speak their mind and carry out responsibilities autonomously, free from the influence of controlling shareholders and other interested parties. In some cases they may have to champion the cause of minority shareholders. But all of these traits may be viewed as assertive and antagonistic by Confucians who practice conformity, tolerance, humility and respect for others. For this reason, many companies in Japan find working with independent/outside directors a strange and unfamiliar experience. For the same reason, it might be equally difficult to recruit individuals from the domestic market who are willing and able to act as independent/outside directors in the company.” (Miles, 2006) Further research on this topic should try to determine the extent to which domestic, Japanese directors make an impact, whether it is good or bad.