Pernille Rudlin - Rudlin Consulting

About Pernille Rudlin

Pernille Rudlin was brought up partly in Japan and partly in the UK. She is fluent in Japanese, and lived in Japan for 9 years.

She spent nearly a decade at Mitsubishi Corporation working in their London operations and Tokyo headquarters in sales and marketing and corporate planning and also including a stint in their International Human Resource Development Office.

More recently she had a global senior role as Director of External Relations, International Business, at Fujitsu, the leading Japanese information and communication technology company and the biggest Japanese employer in the UK, focusing on ensuring the company’s corporate messages in Japan reach the world outside.

Pernille Rudlin holds a B.A. with honours from Oxford University in Modern History and Economics and an M.B.A. from INSEAD and she is the author of several books and articles on cross cultural communications and business.

Since starting Japan Intercultural Consulting’s operations in Europe in 2004, Pernille has conducted seminars for Japanese and European companies in Belgium, Germany, Italy, Japan, the Netherlands, Switzerland, UAE, the UK and the USA, on Japanese cultural topics, post merger integration and on working with different European cultures.

Pernille is a non-executive director of Japan House London, an Associate of the Centre for Japanese Studies at the University of East Anglia and she is also a trustee of the Japan Society of the UK.

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Here are my most recent posts

UK still number one in Europe for Japanese automotive manufacturing – just

The recent news about Nissan and its Chinese battery manufacturing partner Envision deciding to go ahead with expanding the battery plant in Sunderland, to supply a new electric vehicle model, led me to revisit my researches on trends on the Japanese automotive sector in the Europe, Middle East and Africa region. I had blogged in October 2020 that for the first time in at least five years, according to Toyo Keizai data, there were more Japanese automotive manufacturers in Germany than in the UK.

Toyo Keizai’s new directory came out this April, and adding in their more recent data, it seems that the number of Japanese automotive manufacturers in Germany actually dropped by 11, from 31 to 22. So the UK is back in the top spot. Cross checking this against all data for Japanese companies in Germany, it seems that this is more that those 11 companies switched categories rather than left Germany. Many automotive suppliers of parts supply parts for other industries, so they may have decided that the bulk of their business was no longer automotive, or preferred not to be classified as automotive. There were also falls in the numbers of Japanese automotive manufacturers in Spain, Russia, Poland and Portugal.

The number of people employed by Japanese automotive manufacturers is perhaps a better indicator of general health than self classified numbers of companies. The numbers employed by Japanese automotive manufacturers in the UK has dropped by 12% comparing 2015/6 to 2020/21 and by around 8% over the year 2019/20 to 2020/2021. I only have comparable employee numbers for the rest of the region for the past two years, and these show that there has been a 2% drop employee numbers from 2019/20 to 2020/2021. The only other notable decrease was in France, where employment fell by 11%. The most growth was in Morocco, but only by 3%.

So the UK still has the most employees of Japanese automotive manufacturers in the region, but the number of employees has dropped below 30,000 for the first time in five years. The Czech Republic, Germany and Poland are not far behind in terms of employee numbers, and it’s possible Germany still does have more Japanese automotive related manufacturers than the UK, it’s just that they have chosen not to classify themselves as being in the automotive sector. The closure of Honda Swindon and other suppliers to the Swindon plant this month will probably result in the UK losing its top spot both in terms of employees and companies hosted.

The biggest Japanese automotive employers, apart from the actual car assemblers themselves, are the wire harness suppliers- Yazaki and Sumitomo Electric being the dominant Japan owned companies. Unsurprisingly, they base most of their factories in lower labour cost countries in Eastern Europe and North Africa.

Overall, Japanese automotive manufacturers employ around 280,000 people in the region, not including those in the supply chain who are wholesale/importing rather than manufacturing. So it is no wonder that any investment by them is welcome news, but it may take a little more than the recent Nissan announcement to reverse the trends in the UK and across the region.

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The prime minister of the Japanese business world

We were very sorry to hear of the passing of Nakanishi Hiroaki, Chairman Emeritus of Hitachi. There was a nice tribute to him in the Nikkei Business magazine (JPNS), calling him the prime minister of the Japanese business world, who was not afraid to speak out. Not only was he instrumental in turning around Hitachi, along with Kawamura Takashi, but he was a champion of making sure the voices of women and younger people were heard.

He was highly critical of Keidanren (the Japanese business association)’s resistance to increasing external directors on boards, and urged Japanese companies to pay higher wages to their employees. He was also insistent that if Japanese companies did not tackle environmental problems immediately, they would lose their competitiveness. As the head of Keidanren, he fought for Namba Tomoko of DeNA to become the first female vice president of Keidanren, accusing it of being overconcerned about the size and seniority of companies in its hierarchy, saying that to younger people it had become a fossil. He pushed for targets for women in management, declaring that the Japanese economy would sink if its male oriented society was not changed.

Even as he struggled with his illness, he continued to speak out, unafraid of criticism, and wanted not just his successor at Keidanren, but also Japan as a whole to feel free to express their opinions.

Latest Top 30 Japanese companies in UK shows significant divergence

Our latest Top 30 Japanese companies in the UK shows a 1.3% drop overall in employee numbers from 2019 to 2020*, the first fall we have seen in the seven years we have been tracking the Top 30. As most Japanese companies in the UK use an April 1 to March 31 financial year, the fall in employee numbers dates to before COVID-19 pandemic began to have an impact. The small drop masks significant divergences – there were companies whose workforce shrank by over 10% such as Nissan, Honda and Nomura, and also companies which grew significantly, such as NTT and SoftBank.

This tallies with a recent report from Japan’s Ministry of Economy, Trade and Industry (METI) which reported in March 2021 that whereas automotive sector companies have a bleak outlook on the UK market, manufacturers in sectors such as chemicals, pharmaceuticals, electrical machinery and foods are far more positive about future expansion in the UK. According to METI, manufacturers represent around 39% of Japanese companies in the UK, the remainder being in the services and wholesale sectors. Services sectors, particularly IT related, would seem to be positive too from our researches, apart from Fujitsu, which has slipped down a further place to being the 4th largest Japanese employer in the UK, having been the largest for many years previously, to 2017/8.

The 96,000 who work for the Top 30 Japanese companies in the UK represent around 55% of the 176,000 (down from 179,000 the previous year) or so people who work for over a 1,000 Japanese companies in the UK, according to our estimates. The METI survey shows that despite the small drop in the numbers employed by the Top 30, larger companies (defined by METI as having over £600m turnover) will have weathered Brexit far more easily than smaller ones, having the resources and networks to set up agents in the EU, stockpile and open up new logistics and warehousing hubs on the Continent.

Certainly the 50 or so Japanese companies that have withdrawn from the UK over 2019-20 have been smaller in size (under 50 employees) and the larger ones who have shut down operations have usually not withdrawn entirely but rather turned their subsidiaries into branches or merged them with another UK based operation.

As we have said for some years now, Brexit has brought about an acceleration of trends which were happening anyway, and precipitated some long overdue tidying up.

FREE PDF DOWNLOAD OF TOP 30 JAPANESE EMPLOYERS IN THE UK 2021

*2020 defined as the year ending 2020, where most of the year was in 2019, ie April 2019 to March 2020 or January 2019 to December 2019.

Who are the Biggest Foreign Companies in Japan in 2020?

Toyo Keizai has not, as far as we are aware, issued another ranking of the biggest foreign companies in Japan since the one we blogged about in 2018. So for an update, we are relying on the analysis of a Japanese blogger working for a publisher in Tokyo, going by the name of Naganasu (long aubergine, ahem), who has done the number crunching from the Toyo Keizai directory for 2020.

Naganasu has not included minority foreign owned companies such as Nissan, who were top of the rankings last time. This means Accenture (headquartered in Ireland) has shot to the top, with a 70% increase in employee numbers from 7,600 in 2018 to 13,000 in 2020. Gibraltar Life Insurance, a Japan only brand, formerly known as Kyoei, acquired by US company Prudential Holdings in 2001 is still at #2 with 12,731 employees. Naganasu has also not included Sharp, 65% owned by Taiwanese Hon Hai, which was at #3 before.

The largest European-owned Japanese company is Bosch, at #6 with 5,333 employees. VSN (a staffing company acquired by Swiss company Adecco in 2012) has risen to #10 from #31 with 4, 271 employees, a third larger than in 2018. IKEA has also grown in Japan, from 2,700 employees to 3,200, up from #36 to #16.

As in 2018, there is a lack of British owned companies in the top 50. The only one included by Naganasu is AstraZeneca at #19 with 3,000 employees. What happened to GSK, which was at #28 with 3,300 employees in 2018 is not clear. Perhaps they have shrunk to below 2,000 employees, so were not in the top 50. Alternatively, as we’ve often noticed with Toyo Keizai, if you don’t respond to their questionnaires, you don’t get included.

Other European companies in the 2020 top 50 are Adecco, L’Oreal, Bayer, Nestle, Philips, Valeo (French automotive supplier), Triumph (Swiss underwear company) and Autoliv (Swedish automotive company).

Japanese values prevent digital transformation

Kimura Takeshi, a Nikkei IT journalist has a self-styled hard hitting rant in Nikkei Business about Showa values such as omoiyari and how they should be ditched if Japanese IT companies are to compete globally. I have to admit he shocked me, as I even titled my book about how to provide Japanese style customer service “Omoiyari”, but then I was brought up in Japan during the Showa era (1926-1989).

He says omoiyari (consideration for others, forethought) and being close to the customer is still important in hospitality or medicine but is plain creepy and useless when it comes to IT. He points out that all it means is that you are close to other humans in the customer company, who are running the IT department, and who will not necessarily tell you or know the full picture of what is going on in their company.

Other Showa values he gives a good kicking to include gembaryoku – or onsite capability, meaning that suppliers are there working at the customer site and “we never give up, never run away.” As he points out (and I’ve often warned suppliers to Japanese companies of this too) this leads to over-servicing and all kinds of work being done which were not in the original project spec, tipping profits into losses.

He also points out that Japanese companies that boast of these values are usually homogeneous organisations with a strong sense of companionship and self sacrifice, where employees are working for the organisation and colleagues, as well as having a budget busting customer entertainment allowance. Not only will this not be competitive globally, but it also means the company is a closed organisation without diversity. High performers are disliked by others. Deference and consensus based decision making (nemawashi) are the norm.

He says this is why foreigners coming to Japan as tourists love it so much, because there is such a strong urge to be considerate and hospitable towards others. But once they live in Japan, they are expected to be members of the community and learn how to read the air and be considerate of others around them, but find this difficult to do as they have been brought up to be self assertive and individualistic. As a result they are excluded from the community and treated as strangers, causing unhappiness and confusion.

Kimura says it feels uncomfortable to have to tell Japanese people to deny their compassionate natures, but he worries that if they don’t, then Japan will not be able to ride the wave of digital revolution and will not only be underdeveloped in IT but an underdeveloped country in a more fundamental sense. IT companies need to include foreigners so that they can thoroughly discuss and create new digital services without having to read the air or worry about whether it would mean a loss of jobs for people who have supported you on the client side.

Instead of omoiyari based closeness to a customer he recommends “がっぷり四つに組む” (Gappuri yotsu ni kumu – be locked together in 4 ways) which was a new expression to me. It comes from Japanese martial arts, meaning to grab each other’s belts with both hands.

I talk further about omoiyari and Japanese customer service with Rochelle Kopp, founder of Japan Intercultural Consulting, in a podcast available here.

Top Japanese companies for CSR in UK

Only around 10% of Japanese companies in the UK mention any charitable donations in their annual reports, and yet according to Toyo Keizai, many of the largest Japanese companies in the UK top the rankings for contributions to corporate social responsibility, measured in Yen.*

Top of the ranking is Honda, which spent Y9.57bn ($87m) on contributing to society in 2019/20. Activities included a national robot contest and the Honda Eco Mileage Challenge – a competition to see how far a car can be driven on a liter of gasoline, as well as beach cleanups. CSR outside Japan is also included, such as Honda’s professional training course in South America, a Dream Riding Program for women in India and tree planting in Inner Mongolia.

Pharmaceutical companies have always been big corporate givers, unsurprisingly. Takeda is the second largest CSR donor in Japan, spending Y8.55bn (a significant increase on previous years) on the Takeda Science Foundation awards, research grants etc as well as volunteer activities. Third is NTT DoCoMo who have created a DoCoMo forest in 49 locations in Japan and provide scholarships for Asian students.

Other companies in the top 50 who also have substantial presence in the UK include Suntory, SECOM, MUFG, Canon, Panasonic, SoftBank, Sony, Aisin, Eisai, Komatsu, Nomura, Hitachi, Mitsubishi Corporation, Nissan, MS&AD, Daikin, SMFG, Mitsubishi Chemical, Fujitsu, Marubeni, Asahi Chemical, Asahi Breweries, Mitsubishi Heavy and Denso.

By contrast, the largest declared donations in money and “in kind” by Japanese companies in the UK are Toyota who donated £1.3m, Dentsu who donated £900,000 (but this might be across the global network) and Ricoh who donated £500m. None of these appear in Toyota Keizai’s rankings.

Honda of the UK donated £24,000 to charities in the UK last year as well as investing in various sustainability initiatives in education and community, safety, environment and diversity and inclusion.

Fujitsu was also a top 50 donor in the UK, along with MS Amlin (part of MS&AD), Sony Music Entertainment and Sony Interactive Entertainment, Mitsubishi Corp via its subsidiary Princes and Eisai.

As for the other big donors in Japan who don’t seem to be giving much in the UK, it’s either because they are but not reporting it, or it’s an opportunity for their employees to encourage them to contribute to UK CSR activities as well as in Japan.

*Toyo Keizai counts both direct contribution to CSR and business activities which have a social purpose.

Where Japanese employees feel most engaged

There isn’t really a Japanese word for employee engagement, which tells you something in itself, so the concept of “hatarakigai” – which Google Translate renders as “rewarding work” – is more often used when conducting surveys on employee engagement. Foreign companies tend to dominate surveys of top hatarakigai companies in Japan, in contrast to the ranking we covered in a previous post, of companies that are most popular choices for new male graduates, where only Accenture appeared in the top 100.

In the most recent Open Work survey of nearly 90,000 Japanese who had been working at a Japan based company for over a year, in terms of hatarakigai, foreign companies take the top 3 positions – Procter and Gamble is at #1, Salesforce.com at #2, Presidential Life Insurance at #3.

The obvious overlap with the popularity rankings for graduate hires is the Japanese trading companies. Itochu is #4 in terms of hatarakigai and was top of the popularity rankings for new graduate hires too. Itochu‘s rivals Mitsui and Mitsubishi Corp are at #9 and #10 for hatarakigai. The other major trading house, Sumitomo Corporation, trails somewhat at #25.

Various consulting companies, foreign and Japanese, including Accenture again, feature in the top 50 hatarakigai. Japanese manufacturers such as Sony, Asahi Chemical, Keyence, Murata and Astellas are also in the top 50.

The financial services companies that were so popular with the Japanese male graduates are not so dominant – Tokio Marine at #14, Nomura at #36, SMBC at #37 and Daiwa Securities at #43.

Open Work includes in its criteria:

satisfaction with pay and benefits,
employee morale,
transparency,
mutual respect between employees,
opportunity for growth for people in their 20s,
long term human resource development,
regulatory compliance/awareness

It points out the biggest gap between those companies who were in the top 10 and those in the top 50 was satisfaction with pay. Foreign companies are well known to pay better and not follow seniority based pay the way Japanese companies do. Japanese companies also have a tendency to sit on their cash for a rainy day rather than use it to raise the pay of their employees.

However those companies who had improved their ranking the most over the year were those who had improved their scores on long term human resource development. Japan Intercultural Consulting, which Rudlin Consulting represents in EMEA, is delighted to offer their training and coaching services in this regard.

Top 30 Japanese employers in Germany in 2021 compared to the UK

Germany and the UK are host to a similar number of Japanese companies, and a similar number of people are employed by Japanese companies in both countries. Comparing the 30 largest employers in each country reveals some significant differences however, reflecting their different strengths in services and manufacturing,

The top 30 largest Japanese employers in Germany employ around 99,000 people* – 57% of the total 167,000 people we estimate work for around 970 Japan owned companies in Germany. The UK top 30 employ around 94,000 people, just over half of the 180,000 people we estimate work for over 1100 Japan owned companies in the UK.

So there’s not that much difference in the scale or proportion, however only 12 companies appear both in the Germany and UK Top 30. They are largely the ICT/electronics companies such as Fujitsu, Sony, Ricoh, Canon, Panasonic, Konica Minolta, NTT and NTT Data, who presumably are at a scale which reflects population size and therefore domestic consumer and B2B demand for their products and services.

Outsourcing Inc is in the Top 30 of both, following a recent aggressive programme of acquisitions throughout Europe such such as acquiring Otto Workforce. Similarly NSG appears in both Top 30s as a result of its acquisition of Pilkington Glass in 2006 and Olympus as a result of building on its acquisitions of Keymed and Winter & Ibe several decades ago.

Hitachi only just makes it into the Top 30 for Germany, whereas it is number 2 in the UK, largely thanks to the organic expansion and acquisitions by Hitachi Rail.

The companies that only appear in the UK Top 30 are either in the automotive sector such as Nissan and Honda, in the financial services sector (MS&AD, MUFG, Nomura, SMFG) or the general trading companies and their acquisitions (Itochu, Mitsubishi Corporation, Marubeni). Toyota appears in both Top 30s, although it only has manufacturing in the UK. In Germany its main companies are Toyota Kreditbank and Toyota Gazoo Racing. Dentsu, the advertising agency, is also in the UK Top 30, reflecting the traditional strength of the UK in marketing services, leading to the acquisition of Aegis and many other British agencies and resulting in Dentsu’s global headquarters being located in London.

The companies that only appear in the Germany Top 30 are Sumitomo Electric, which is at number 1 due to the large numbers employed at its factories acquired from Volkswagen and Siemens in 2006, DMG Mori Seiki (another manufacturing acquisition), Lixil (acquired Grohe), JT International (its German factory a legacy of RJ Reynolds owning Hans Neueberg, in turn acquired by JT International), Showa Denko (owns SGL Carbon), and other companies with manufacturing in sectors of traditional strength for Germany such as chemicals, pharmaceuticals and engineering.

So in a way, the UK hosting (at least until July 2021) manufacturing plants for the three major Japanese car brands is more of an anomaly, and the rest of the Japanese investment in the UK reflects the UK’s strengths in services, particularly financial and commercial, as a centre of international trade, whereas Japanese investment in Germany reflects traditional German manufacturing and engineering strengths.

You can download the Top 30 Japanese companies in Germany and in the UK for free below:

The Top 30 is by corporate grouping, so each entry will contain several Japanese companies. In Germany’s case, there are 186 companies in the Top 30 employers. If you would like more detail on which companies appear in each group, their size in terms of employees and their location, please contact us. Prices start from 10c per company, with a 100 euro set up fee.

FREE PDF DOWNLOAD OF TOP 30 JAPANESE EMPLOYERS IN UK 2021

For the 2022 Top 30 Japanese companies in Germany, please see this post.

*This post and the Top 30 Japanese companies in Germany was updated on 25th April 2021.

Japanese companies’ employee numbers shrinking more in Europe than elsewhere

The quarterly survey by Japan’s Ministry of Economy, Trade and Industry reveals that employment in Japanese companies in Europe fell more than other regions in October to December 2020, a reflection of the continued declines in capital investment and sales in the region.

Globally, Japanese companies’ sales improved 3.8% on the previous year, the first increase in 8 quarters, but for Europe there was a 1.8% decline, the tenth consecutive quarterly decrease. Sales in North America fell slightly more, by 2%, but the decline has been more recent – over 5 quarters. Sales in Asia rose 9.3% (and comprise over half of Japanese companies’ sales overseas), the first growth in 8 quarters.

Capital investment declined across the board, by 17.6% – the fifth quarterly consecutive decline. The fall in investment in Europe was 19.6%, greater than North America’s 16.2% drop, but lower than the 23% fall in investment in Asia.

The total number of employees fell globally by 4%, the 7th consecutive quarterly decline, and by 7.9% in Europe, the 4th consecutive quarterly decline. The number of employees only fell by 3.8% in Asia (7th consecutive quarterly decline) and 3% in North America (4th consecutive quarterly decline).

Sectorally, the decline in sales in Europe was mainly in electrical machinery (13.9% drop) and transportation equipment (which includes automotive) with a 2.9% fall. Capital investment in the European transportation equipment sector fell by nearly 40% and there was a 15.4% decline in capital investment in the European electrical machinery sector too. European employee numbers fell 26.5% in electrical machinery and 3.8% in transportation equipment. There were increases in sales, investment and employment for Japanese companies in Europe in the chemical and general purpose machinery sectors, however.

The path Japan should take to zero carbon – former Hitachi president Kawamura Takashi

Kawamura Takashi is famous in Japan for being instrumental in turning Hitachi round after its largest ever loss in 2009. He has just finished 3 years as chairman of TEPCO (Tokyo Electric Power). Nikkei Business asked for his view on the Japanese government goal of achieving zero carbon by 2050. While more diplomatic than Mr Kobayashi of Mitsubishi Chemical, he points out that country level goals need to be translated into industry based goals, and this cannot be left up to individual companies. Government, electric power companies, manufacturers and citizens will have to unite to do this, he says.

This could apply to Japanese companies in Europe as well in our opinion. There is more scope for Europeans working in Japanese companies to network with each other to collaborate to achieve sustainable development goals, and not just leave it up to the Japanese exaptriates.

Kawamura points out that it’s tough for each company to go it alone. Equipment around the world for companies such as steel manufacturers will become obsolete if they were to switch away from current product methods. Chemical companies could no longer make plastic from petroleum but artificial photosynthesis has been worked on for decades and is still unsuccessful.

“But if it cannot be done, the earth will be destroyed first”. It may seem that the solution is for Japan to “choose the path of returning to the lifestyle of the Edo period (1603-1868) living quietly with a small population” but Kawamura thinks this is not a responsible thing to do when Japan has the third largest GDP in the world.

Hydrogen can be one solution but the problem is making it. It can be made from water with nuclear power but of course this is controversial. There are few regions in Japan where the efficiency of generation of renewable power is high enough to make hydrogen however. So it might be necessary to find methods of producing hydrogen from overseas renewable energy power generation and transporting it to Japan for distribution as energy.

Kawamura says Japanese business leaders are too emotional. They cannot cut business lines which have been developed in their companies over the years, so end up having to bring in foreign executives to do it. “It’s a lie that Japanese can’t do it. Japanese companies don’t want to make calm decisions based on economic rationality, but Japanese really should do this for themselves.”

Asked if he will stay on another 3 years at TEPCO to help with zero carbon he says that at 81 he is too old and he is wanting to do things that give him ikigai (a reason for living outside of work – see our Japan Intercultural Consulting video on this) such as taking his time to read books, which he said he could not do when he was an executive.

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