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Doing Business with the New Japan

Book Review

Doing Business with the New Japan

Succeeding in America’s Richest International Market

By James Day Hodgson, Yoshihiro Sano and John L. Graham

In recent years it has been heartening to see the growing sophistication of analysis of Japan, the Japanese culture and the Japanese economic system that has been published in English. In the past, the West has been handicapped by either a patronizing attitude or a regrettable lack of understanding about the country. This has hobbled the efforts of those who have had to negotiate with the Japanese regarding various projects. Although there is still much room for improvement, we have certainly come a long way.

“Doing Business with the New Japan” is a perfect example of this fresh approach. A former US ambassador to Japan, an international investment banker and a professor of marketing and international business have teamed up here to explore the nuts and bolts of putting deals together with the Japanese. They concentrate on practical matters rather than theoretical or rhetorical hypothesizing.


James Day Hodgson was the ambassador to Japan from 1974 to 1977 after serving as US secretary of labor from 1970 to 1973. Before that, he was an executive at Lockheed Aircraft Corporation and was a corporate director of twelve other companies including Hewlett-Packard and Mitsui Bank. He also worked as a consultant to both Japanese and international corporations. Clearly he brings a wealth of experience to this book.

While he was ambassador to Japan, Hodgson met with a variety of businessmen and Japanese officials, and found himself forced to deal with difficult questions. The first chapter of “Doing Business with the New Japan” is entitled, “A View from the Ambassador’s Chair,” in which he offers several anecdotes that illustrate typical problems that arise when involved in business negotiations with Japanese companies. He first presents the facts of these situations, then breaks them down into the pertinent factors, analyzes them, and relates how the actual affair ended up. Hodgson then relates the advice that he gave the businessmen at the time. Finally, he explains the conclusion to be drawn by the circumstances and a nugget of wisdom that one can take away from them to use in other negotiations.

Hodgson also writes about encounters with such famous figures as Dr. Chie Nakane, the Japanese anthropologist and Henry Kissinger, US Secretary of State at the time. They, too, have interesting insights to offer. For instance, Kissinger says, “When you get to Tokyo and ask questions of the Japanese, do not expect answers. All you will hear is proverbs.” Hodgson then goes on to discuss the questions that he asked and the proverbs that he heard in response.

Yoshihiro Sano and John L. Graham cover the details. Sano founded the Pacific Alliance Group, an international investment banking and consulting firm. Graham is a professor of marketing and international business at the University of California, Irvine. They explain the importance of paying attention to the cultural differences between Americans and Japanese, such as how to greet Japanese businessmen in the proper way. They also differentiate between the American style of negotiation and the Japanese style.

The heart of “Doing Business with the New Japan” is negotiating, whether in regards to laying the groundwork, assembling a negotiating team, separating form and substance, or following up after the negotiations have been concluded. However, they offer a great deal of other information in connection with these matters as well. The differences in cultures and personalities are examined, advice in modifying agreements is offered and suggestions regarding how to avail oneself of American government assistance are given. In addition, sidebar selections from experts on Japan such as Lafcadio Hearn, and profiles of foreign heads of major Japanese corporations like Howard Stringer (Sony), Carlos Ghosn (Nissan Motors) and Rolf Eckrodt (Mitsubishi Motors) show how these matters work in a practical sense. The book is also filled with charts and graphs that give perspective and the historical context.

“Doing Business with the New Japan” starts by enumerating the attractions to pursuing opportunities in that country:

Significant opportunity for outside capital investment,

An attitude that welcomes that capital,

An economy seemingly on the brink of an upward economic cycle,

A country surrounded by several other flourishing economies,

A country unthreatened by political instability, and

A country whose relationship with the United States is strong and enduring.

The book concludes with this assessment of the road ahead:

As we see it, a “good news” future exists for Japan. A review of their past reveals that no people have greater talent for living with paradox and ambiguity than do the Japanese. For one thing they are not prisoners of the either/or pattern of thought that infests Western minds. They have demonstrated an almost unique ability to thrive by doing things their own distinctive way. And their way certainly is distinctive. No other people on earth ever consciously cut themselves off from the rest of the world for two and a half centuries, an act that clearly reflects their penchant for unique behavior. The rest of us must recognize that doing things their way is a proven Japanese specialty. To us this may often look like doing it the hard way, but the Japanese thrive on it.

If one is interested in “Doing Business with the New Japan,” few books offer as much good, practical information about how to do that effectively.

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