Rudlin Consulting provides expert analysis and consulting to people working in or with Japanese companies in Europe, Middle East and Africa.
Whether you want to approach a Japan-owned company as a supplier, subsidiary or partner, we can help you understand its corporate culture and strategy, and identify the people and processes necessary for success.
We can also provide cultural awareness training for your employees, as the exclusive representative in Europe, Middle East and Africa of Japan Intercultural Consulting.
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When people hear that I speak Japanese they usually say “how amazing – you must be so clever” and “you must be in demand for all sorts of jobs”. Actually I learnt Japanese the stupid way, which was to live in Japan as a child, and go to a Japanese school. And as for being in demand, I find that most companies do not want a Japanese specialist as a full time employee.
Think vocation before language ability
So I recommend to Japanese speakers that they think about what profession or industry they want to be in first, and then look for ways to incorporate their language skills. Most companies rightly put a priority on people’s technical or interpersonal skills rather than a specific language ability.
Avoid jobs which might use your language, but there’s no career path
It’s true that Japanese companies and people who supply services to them outside of Japan often hire Japanese speakers – but this can end in frustration if the Japanese speaker is simply given a nebulous role as a translator/customer liaison/interpreter with no clear career path.
Once a week Japanese lessons lead to frustration if you want to be fluent
Non-Japanese people working in Japanese companies often ask me if it’s worth learning Japanese themselves. I always say yes, although I warn them that they may get very frustrated if they expect a lesson a week to lead to fluency. Once they discover the three different ways of writing and multiple levels of politeness, not to mention the countless ways of counting, it’s very easy to give up in despair.
I’ve also been asked a few times if it’s true that Japanese colleagues dislike it if you speak Japanese, because it means that you know what they’re saying even though you’re not “one of them” and can’t be trusted with secrets.
This seems paranoid to me and certainly I’ve never experienced anything but relief from Japanese colleagues who realise that they don’t have to struggle to explain themselves to me in English.
Japanese is like skiing
What can cause mistrust however is reaching an intermediate level, where you think you understand what is going on (but maybe don’t), and inadvertently say the wrong thing or say something in an offensive way, because your language skills aren’t quite as good as you thought. Your Japanese colleagues assumed your Japanese was good enough to rely on you, but now you’ve let them down.
It’s a bit like skiing – the most dangerous level is the intermediate level. At the beginner level you might fall over a lot but you are unlikely to be going at speeds or off piste so it won’t kill you. But if you become overconfident, and attempt something risky without the advanced skills necessary, you may well end up in hospital.
The occasional mistake is forgiven
The occasional mistake is usually forgiven, however. Once – in a hurry – I sent an email to a customer saying “thank you for your response” using the Japanese word “henji/返事” for “response” but I failed to notice that for some reason it had auto corrected to a different “henji” – “変事” – which means “strange thing.” It probably helped that I was young and also had – up to then – been efficient and polite. My customers just thought it was very funny.
Even a weekly lesson will help you understand Japanese culture
Even though rapid fluency in Japanese is pretty impossible with just a lesson a week, I nonetheless think Japanese companies should fund employees’ efforts to learn Japanese. There is more and more evidence to show that learning another language helps you understand the culture and even unconsciously adapt the way you behave – how you analyse and react to situations.
For example, the Japanese language is “selfless”, which is a core Japanese value too. A typical English sentence has a “Subject, Verb, Object” construction. “I love you” for example. But in Japanese there is often no subject, and even no object. You just say “love”, and the context provides all the clues. This is another Japanese communication trait – to be “high context” – to understand what is not being said, and be sensitive to the context.
Japanese companies value multilingual people even if Japanese is not one of their languages
Having multilingual employees is a benefit not just because they may understand Japanese corporate cultures better. Recent research in neuroscience shows that multilingual people’s brains operate differently. For example, they make more rational decisions if they are functioning in a non-primary language. Working in another language reduces loss aversion, so people become better at assessing risks and benefits.
My observation, having worked with hundreds of Japanese companies in Europe over the past 12 years is that they tend to hire proportionately more multilingual employees than domestic European companies do. Perhaps they instinctively realise that multilingual people – even if Japanese is not one of their languages – are more likely to have the abilities to manage complexity and problem solve that they are looking for.
What to do if you want to work for a Japanese company
· Just speaking Japanese is not enough – at least for long term career fulfilment (on both sides). So think about your vocation – what you will love doing professionally – first. Then look for ways to develop or incorporate your language skills.
· If you want to improve or learn Japanese well enough for it to be of use in a Japanese company, you need to immerse yourself as much as possible. If you can’t go and live in Japan, then make sure you take the opportunity of someone like LinguaLift’s services to do something every day to expose yourself to the Japanese language.
· Even if you can’t reach a professional level of Japanese, don’t despair – just the fact that you made an effort will impress a Japanese employer, and give you some clues into Japanese culture, which will help you be effective in the Japanese workplace.
· If you’re multilingual in other languages as well, apply to the regional headquarters of Japanese companies – that’s where they need people with all kinds of linguistic and cross cultural communication talent to coordinate their business overseas. And if working in Japan is one of your goals, they may well be open to transferring you to their Japan headquarters. Then you’ll get good at Japanese – fast!
Le quatorze juillet seems a good moment to announce our new Top 30 Japanese companies in France.
The total number of employees covered by the 30 largest Japanese employers in France is 35,000 – lower than the totals employed by the Top 30 in Germany (56,000) and the UK (80,000) but the automotive sector is still dominant with nearly half of the Top 30 being automotive or having some automotive business. Obviously some of the larger employee groups are related to manufacturing workforces – Toyota, JTEKT and NTN for example.
M&A’s have played a part too – NTN, a bearings company, acquired French company SNR Roulements (which was part of the Renault group) in 2006. Toyota Tsusho acquired CFAO in 2012 – a trading company with over 10,000 employees in Africa. Fast Retailing added French brands Princesse Tam Tam and Comptoir des Cotonniers to its retail group alongside Uniqlo.
As you might expect, food and drink companies also feature – Nippon Suisan acquired Cite Marine, and Suntory has its Orangina Schweppes brands based out of France. Ajinomoto is also headquartered in France for the region.
The other key sector is technology, particularly imaging – Canon, Ricoh,Toshiba, Konica Minolta, Olympus and Fujifilm. Once again, each country’s historical comparative advantage is clear (cars, food, films for France, engineering for Germany and cars, finance and other services for the UK) showing how trade and integrated markets encourage specialisation.
|Rank||Company||France employees 2016|
Whether you’re looking to work for or supply to a Japanese company, size matters. The most obvious reason being, as bank robber Willie Sutton apparently never said, “that’s where the money is”. That’s why we started our Top 30 Japanese Employers rankings – we’ve found them useful in understanding our customer base and the likely concerns of participants in our seminars.
We use the number of employees as a proxy for size rather than turnover or profit, and although there is a degree of correlation between employee numbers globally and in Europe and overall profit, there are some exceptions.
Toyo Keizai have recently listed up the companies* who made the biggest cumulative profit in the past 10 years and it’s absolutely no surprise that Toyota, one of the biggest companies in Japan and #9 amongst Japanese companies in Europe, made a whopping Y11 trillion ($99bn) cumulative profit from 2007 to 2017, far outstripping NTT and NTT Docomo at #2 and #3 who made less than half that amount. NTT and NTT Docomo are not in our Top 30 Japanese companies in Europe, although another group company, NTT Data, is.
However NTT and NTT Docomo never made a loss, whereas Toyota did go into the red – with a loss of $.8.6bn in 2008/9. Honda, who has had a tough time in Europe (and is #23 in our rankings), has also never made a loss, and accumulated a $36bn profit over the decade. Nissan, who made a loss but was famously turned round by Carlos Ghosn, is 10th largest in Europe in our rankings and has the 6th largest cumulative profit.
I was surprised to see my old employer Mitsubishi Corporation at #5, as they too had some rough patches particularly with losses in the commodity side, but clearly overall the Japanese trading companies have been very profitable, despite their death being heralded every decade – Mitsui is at #9, Itochu at #11, Sumitomo Corp at #14 and Marubeni at #21.
Unsurprisingly, almost none of the Japanese electronics companies feature in the top 30, apart from Canon at #10 and Mitsubishi Electric at #25. Other industries in the top 50 most profitable are automotive (Denso, Bridgestone) and pharmaceutical (Takeda, Astellas) related, and also heavily domestic businesses such as telecommunications (KDDI, SoftBank as well as NTT mentioned above), rail and retail (7&I, Fast Retailing).
Two of the largest Japanese companies in Europe – Fujitsu and Hitachi – are at #69 and #70 – Hitachi’s cumulative profit was heavily dented by the historic loss of $8bn in 2008/9. The largest company in the Europe and Africa region – Sumitomo Electric Industries (due to its labour intensive automotive manufacturing operations) is at #38, with a $6bn cumulative profit.
*Excludes banks, insurance and other financial services companies
Fujitsu continues to be the largest Japanese employer in the UK despite recent restructuring. We’ve added Sumitomo Rubber to the list, following its recent acquisition of UK tyre wholesaler and retailer Micheldever. Along with Kwik Fit, another UK tyre dealer and car servicing company is owned by Itochu at #3, this means that over a third of the companies in the list are automotive or have a substantial automotive component to their business.
We’ve also revised upwards our estimate of the total number of Mitsubishi Corporation employees, having confirmed from various sources that its main subsidiary in the UK, Princes, the foods company, has around 3000 of its 8000 employees in its UK operations.
The top 30 now cover around 80,000 of the 140,000 employees that Japanese companies in the UK employ. Individual profiles of each company, including trends in employment, regional headquarters, European organisation and CSR and diversity analyses are available – please contact pernillerudlinrudlinconsultingcom
|Rank||Company||UK employees 2016|
|14||Mitsubishi UFJ Financial Goup||2,100|
|17||Mitsui Sumitomo & Aioi Nissay Dowa||1,867|
The bankruptcy of Takata and acquisition of its assets and operations by a Chinese owned US based company Key Safety Systems is not perhaps the most auspicious moment to announce our new Top 30 Japanese employers in Germany – where Takata, for the time being, is at #3. Its substantial presence in Germany (in contrast to the UK, where it has no operations at all) is due to the acquisition of Petri AG in 2000.
Another Japanese company which should perhaps be classified as Chinese (or rather, Taiwanese) is Sharp. Since Hon Hai/Foxconn’s acquisition, Sharp has radically reorganised itself in Europe. There is Sharp Devices Europe, headquartered in Munich, with what was Sharp Laboratories and is now renamed a Design Centre in Oxford UK and Sharp Business Systems Europe, headquartered in the UK along with the Information Systems unit, with Visual Solutions in Munich and Energy Solutions in Hamburg. Sharp Telecommunications in the UK is being closed down. Sharp’s white goods brand (microwaves etc) is now under license to the Turkish company Vestel but there was a rumour last year that Sharp under Foxconn wanted to buy the brand back.
Many of the other large Japanese companies in Germany are also the result of acquisitions, like Takata – Musashi Seimitsu acquired Johann Hay in 2006, Lixil acquired Grohe/Josef Gartner 2011-2013, Panasonic acquiring Vossloh in 2000 etc.
Comparing to the UK Top 30 – there are some similarities – Fujitsu at the top and Sony, Ricoh, Canon, JTI and Hitachi all featuring. No doubt the list will be revised as we uncover more companies, but it does seem that there are not quite so many employees per large company in Germany as there are in the UK. This might be partly to do with the car factories – Honda, Nissan and Toyota and their associated suppliers in the UK – and also the trading companies such as Itochu, Sumitomo Corporation and Mitsubishi Corporation have acquired larger companies in the UK than they have in Germany.
|Rank||Company||Germany employees 2016|
|16||Sumitomo Heavy Industries||1,386|
|18||Mitsubishi Hitachi Power Systems||1,352|
Our reports on the Top 30 Japanese employers in Europe, Middle East & Africa (showing trends in total global employees, Japan based employees, EMEA based employees) and the Top 30 Japanese employers in the UK and Germany (showing trends in total employees, regional HQ location, region covered, percentage UK of Europe and of global) are available as pdfs – please contact pernillerudlinrudlinconsultingcom
Over 300,000 permanent staff worldwide, representing around 20% of total headcount have been “let go” at Panasonic, Sony, Sharp, Toshiba and other Japanese electronics companies over the past five years, according to analysis by Toyo Keizai.
Panasonic, Sony, Hitachi, NEC, Fujitsu, Toshiba and Sharp are all represented in the 10 companies who lost the most employees globally and the only company that isn’t electronics related amongst those 10 is Daiichi Sankyo – because of acquiring and then selling off Ranbaxy, the Indian generics drug manufacturer. The other companies making up the 10 are Renesas and Mabuchi Motors – both B2B electronics companies.
Panasonic lost nearly a third of its employees -117,417. Their turnover also shrank (but not by a third) over the same period and they reduced the number of consolidated companies (subsidiaries) from 633 to 474. Only around 4% (10,000 – of which around 700 in UK, 3000 in Germany) of its employees are based in Europe anyway, so it’s clear the bulk of the reduction happened in Japan and China.
Sony was second, with a reduction of 42,900 employees, representing around 26% of employees in 2010/11. This was largely through restructuring its electronics business in Japan and North America, with the film, music and finance segments remaining stable. Sony has also restructured its electronics business in Europe, losing around 40% (2,000) of its headcount (UK & Ireland = 22% reduction from 1,386 to 1,061, Western Europe 50% reduction from 3,271 to 1,635 and Eastern Europe only 11% down, from 423 to 376) The total of Sony’s employees in Europe including film, music and computer entertainment represents around 10% of the global total of 125,300.
Renesas – the semi-conductor manufacturer which was formed out of bits of NEC, Hitachi and Mitsubishi Electric has lost over half its employees – 27,470. Headcount is now 19,160 with the bulk of its European employees being located in the UK (805 employees in 2012, now down to 633) and Germany (831 employees).
Hitachi‘s headcount reduction was only 7%, but as it was 7% of over 350,000 people, this still put it in the top 10. In the UK and Europe by contrast, Hitachi has grown due to acquisitions and expansion of their rail, consulting, finance and nuclear power businesses.
NEC cut its employees by 15% (17,114) and Fujitsu by 9% (15,821). Fujitsu’s employee numbers in the UK (where it remains the largest Japanese employer) over the past 5 years rose from 10,030 in 2012 to 11,765 in 2015, but a further restructuring has led to headcount dipping below 10,000 in 2016. The pattern across Fujitsu’s EMEA (or now EMEIA) region is similar – having been 31,000 five years’ ago, then reduced, then expanded again, and now another restructuring since 2015/6 to the current total of 28,707.
Toshiba has only cut 7% (14,829) of its headcount so far but this will change with the spin off of Toshiba Medical Systems to Canon and household appliances to Midea as well as the controversial sale of its chip business. There have been cuts to other businesses in Europe, with employee numbers dropping around 10% 2015/6.
Sharp, owned by Taiwanese company Foxconn/Hon Hai as of last year, cut 22% of its employees (12,069) over the five year period. Much of its consumer electronics business has been licensed to other manufacturers, resulting in the closure of Sharp Electronics UK and a new company, Sharp Business Systems being set up with its headquarters in the UK and business units headquartered in London (information systems), Hamburg (energy solutions) and Munich (visual solutions).
Brexit looks to accelerate these trends – companies such as Sharp, which were restructuring anyway, are using Brexit as a further stimulus. To ensure “maximum supply chain efficiency” Sharp has already transferred its European stock and logistics operations from the UK to its subsidiary in France (to be managed by its German subsidiary) in September 2016. At the same time it sold its energy solutions business in the UK to its German subsidiary and closed down Sharp Telecommunications UK (22 employees). Overall Sharp’s employees in the UK look to drop from 617 in 2015 to 553 in 2017, plus the factory in Wales which manufactures microwave ovens – licensed to Turkish company Vestel.
We’ve revised our Top 30 Japanese employers in Europe, Middle East & Africa (EMEA) again, this time to include Toyota Tsusho (in at #12) and Toyota Boshoku (in at #29), bumping NYK and Suntory out of the rankings.
The 30 biggest Japanese employers in EMEA now represent over 460,000 employees, around 12% of their total global employment. EMEA employee totals have increased more than the global totals, at around 6% from 2014/5 to 2015/6 compared to <0.5% worldwide, showing that the region is still growing for Japanese companies. As you might expect, the total employment in Japan is shrinking, by about 2% year on year.
Adding Toyota Tsusho and Toyota Boshoku made me appreciate once again how important the car industry continues to be worldwide as a source of employment and also how dominant the Toyota Group is. 5 out of the Top 30 are Toyota Group companies (JTEKT and Denso as well as Toyota Tsusho, Toyota Boshoku and Toyota Motor). A further 4 are purely automotive (Yazaki, Nissan, Bridgestone, Honda) and 6 have automotive related companies in their group (Sumitomo Electric Industries, Hitachi, Asahi Glass, NSG, Panasonic and Toshiba).
Toyota Tsusho is not entirely focused on cars however. It is a general trading company, and is particularly strong in Africa, since it acquired the French company CFAO in 2012. CFAO has an automotive sales network but that is only part of its business. Toyota Boshoku makes automotive components such as seating, door trims and air filters.
Similarly, 8 out of the Top 30 Japanese employers in the UK are automotive and a further 2 have automotive related businesses in the group. Our revised Top 30 now included Sumitomo Rubber, who have not only acquired the global rights to the Dunlop brand but also bought a UK tyre distributor Micheldever earlier this year.
Our reports on the Top 30 Japanese employers in Europe, Middle East & Africa (showing trends in total global employees, Japan based employees, EMEA based employees) and the Top 30 Japanese employers in the UK (showing trends in total UK employees, regional HQ location, region covered, percentage UK of Europe and of global) are available to subscribers of our premium newsletter – subscriptions available here.
A British former advertising executive once told me that he and his counterparts in other ad agencies in Tokyo regularly held FUD drinking sessions where the D stood for Dentsu and the F and the U, well… But it does seem as if Dentsu’s iron grip on Japan’s marketing and advertising industry is coming to an end.
Dentsu is Japan’s largest advertising agency and has also recently entered our Top 30 Japanese companies in the UK thanks to the acquisition spree it has been on, consolidating multiple purchases of agencies in the UK and elsewhere into Dentsu Aegis Network, headquartered in London.
So dominant is Dentsu in advertising spend (although its rival Hakuhodo is traditionally stronger in magazine advertising) that you rarely get much critical coverage about it in the Japanese media. Critical analyses are starting to appear now though, following the suicide of Matsuri Takahashi in 2015 from overwork and then revelations in the Financial Times (clearly undeterred by being owned by the Nikkei group) of Dentsu overcharging clients for digital advertising, both leading to the resignation of the President Tadashi Ishii in December 2016.
“Corporate culture at Dentsu is like the military”
Shinichiro Kaneda in the Nikkei Business takes a look at whether the culture of Dentsu has changed since, in the May 8th edition of the magazine. “The corporate culture is like the military” according to Takahashi’s mother. Kaneda says yelling can still be heard coming from the “sermon room” as one meeting room was known, for small mistakes or a lapse by junior staff. New graduate hires have been threatened with the tonsure if they do not reach the peak of Mount Fuji in the top group during the new staff orientation programme.
This military culture is necessary to Dentsu says Kaneda, because it is based on Dentsu’s unique position with regard to its clients. “What the head of the advertising section of a client says is an order which must be obeyed” says a former executive. “Even if they give two contradictory orders, you have to comply with both.”
Crush new graduates’ pride
But the new graduate hires have all come from elite universities like Tokyo. “People who think logically want to answer back. So Dentsu have to, at the outset, crush graduate hires’ pride and personality. That way, they will just fall in line with what other people tell them to do”.
Takahashi was a graduate of Tokyo and suffered when she found herself being sucked into this culture. Dentsu bears responsibility for not changing this culture, but behind it is a wider problem across the whole of the business sector of Japan, says Kaneda.
A wider problem across Japan’s business sector
Dentsu’s clients are major companies with advertising budgets in the millions of dollars. The head of the advertising section reports straight into the top executives of the company. Requests from clients bypass Dentsu’s own sales force and go straight to the business units and in some cases to Dentsu’s top executives. Everybody gets copied in and it becomes a “stamp rally” and if even one person opposes it, then the plan is overturned,” says a Dentsu insider.
This affects the shop-floor at Dentsu who are forever urgently redrafting proposals while at the same time having to keep an eye on costs.
The media is also very demanding. TV stations try to sell advertising as a package of both late night spots and peak time spots which Dentsu has to persuade its clients with large budgets to swallow.
When economic times were better, money flowed around and budgets and manpower were generous. Results were measured with a few qualitative surveys.
But now the Japanese economy is stagnant and with digitalization, large budgets covering everything are being subject to the scalpel and foreign companies in particular are asking for a much greater level of detail.
Traditional mass media is less influential and internet advertising is not only cheaper but results can be measured quantitatively.
Militaristic approaches do not work in this kind of situation. “It has exposed the contradictions of the Japanese workplace” says a Dentsu executive.
In order to keep up profits and save the face of the advertising departments of clients, Dentsu keeps offering advertising services that they claim will sell, but then the results are measured quantitatively, and if targets are not made, harsh treatment is handed out. This is particularly true of digital advertising.
“Dentsu is a warning to Japanese companies who do not look at what is happening at the ground level, and just pursue profit” says Kaneda.
How Dentsu compares to Hakuhodo
Former Hakuhodo (the second largest ad agency in Japan after Dentsu) employee and now author of many books, Nakagawa Junichiro, was interviewed in the Toyo Keizai magazine regarding the “super elite” of Dentsu and Hakuhodo. “they are neither a normal company nor are they media. They do anything that is related to communication. They have both made a lot of money and the employees are paid well. Yet they because they do not make their internal workings transparent, it is not clear what kind of companies they really are.”
“They will say yes to whatever the client asks for. The employees are simply a mass of corporate slaves. There are lots of internal organisations going by foreign sounding names or numbers. For example, one local government was told their account was being looked after by the #13 section but then this section split off and changed its name. This happens almost on a daily basis to meet client needs.”
“The human networks are complicated. For example if a magazine says it wants to write about Company A, the PR department of Company A will ask Hakuhodo if the magazine is respectable or just trying to blackmail them into taking advertising. Hakuhodo will ask one of its sub contractors who know this area well. But it’s not always so clear what the sub contractor’s own interests might be.”
Both Hakuhodo and Dentsu run campaigns for political parties – usually Dentsu for the LDP, the centre right party that has been in power during most of the post war period and Hakuhodo for the DPJ (now the Democratic Party). Since the election has moved onto the internet, the amount of money following around has become greater. All kinds of media are now being used from videos to animated graphics and Dentsu and Hakuhodo try to offer the full range.
Learning to bow
Shazai press conferences (where executives have to bow in apology for some misdemeanour) are also good business. A rehearsal generally is charged at Y1m to Y2m ($9000-$18000) – the agency role play being journalists, they create various scenarios and make a recording of it and guide executives on what to say. “I am pretty sure you can see Dentsu’s influence on Sarah Casanova, the President of McDonalds Japan’s apology, if you look at the way she behaved the first time compared to the second time” says Nakagawa.
The amount the agencies earn from one client can be significant. In 1996 when Hakuhodo won both the Nissan and the Mazda accounts, their turnover rose by Y130bn. “So it’s tough on your career if you lose accounts like that. Retaining clients by being totally devoted to them becomes key and the sales executives are seen as the elite. Although at Hakuhodo the creatives are the elite, and the salaries are about 70% of Dentsu’s, but still pretty good. What’s true of both agencies is that sense that you cannot do anything in your own organisation or by yourself, you are nothing without the agency.” So meetings tend to be full of people, and so as not to anger the client, instead of creating the trend, you tend to go with the flow.
Nakagawa left Hakuhodo because “when I started working on the Amazon account, I realised I had become a typical agency salaryman who simply supports the career of some middle aged guy at the client’s, who I don’t even like.”
Overtime is a problem not just in the advertising agencies
“Overtime is a problem for all Japanese companies” not just advertising agencies. “People take the “customer is god” idea too much too heart. Both Dentsu and Hakuhodo try to achieve over 90% for their clients. If they stop doing that then maybe overtime will disappear.”
“Dentsu is not that strong in the digital space. There’s still things they need to learn. They are good with TV for the World Cup and the Olympics, but they are being beaten on digital. The specialist shops are stronger. Unfortunately, with digital you can always keep adjusting and improving so the work never ends”
“Advertising executives are remote from real life. They only hang out with the top few percent of income earners. They are all graduates of top universities. But they are not that corrupt.”