Compare and Contrast Business Systems in Japan and China. Answer with Reference to Relevant Theories and Use Comparative Country and/or Corporate Examples.

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Compare and contrast business systems in Japan and China. Answer with reference to relevant theories and use comparative country and/or corporate examples.

Word count: 2,608

To understand the differences between Japanese and Chinese business systems we must first understand the meaning of a “business system”. A “business system” is a “methodical procedure or process, used as a delivery mechanism for providing specific goods or services to customers in a well defined market” (1). Unlike the Eastern ways of doing business, Asian-Pacific business is heavily influenced by religion and the ways of society plays an important role in the approach they take on doing business. Before we compare and contrast two leading countries, it is important to analyse the business culture and the economy of both countries. This essay will compare and contrast “how they do business”, “how the government interacts with the business market” and “how businesses borrow money”.


The Japanese business system is a very complex, society oriented model. It has been formed by centuries and centuries of “feudal military dictatorship”, often referred to as a “Shogunate” (2). They implemented an early form of capitalism, called “Kabunakama”- a union of merchants “entrusted by the “Shogunate” to manage their respective trades, and were allowed to enjoy a monopoly in their given field” (3). This form of capitalism and state run economy is still present, up to this day, in the 21st century Japanese business and culture. According to Kahn, Japan, and most of the important Asian pacific countries or cities, were very heavily influenced by a “neo-Confucian” style of economics. The traits of which included “sobriety, a high value for education, a desire to succeed, seriousness about life and a hard-working ethics” (5).

Business Culture:

Japanese culture is similar, in some ways, to the rest of the Asian pacific countries. Their awareness of their cultural heritage and values is key to the way they address their lives and their business attitudes. To understand Japanese business it is imperative to understand their culture and how it affects their business attitudes and decision making. Japanese people are taught, from a small age, to live in harmony and to never lose face, to never turn a peer’s proposal down, nor insult any of their own, nor to ever disrespect (6). The non- verbal communication that happens in Japan is very important, sometimes Japanese people “trust non-verbal messages more than the spoken word as words can have several meanings”(6). These attitudes are reflected in the way they do business. Many of the cultural attitudes are quite foreign to western businessmen who often find it difficult to invest into Japan (7). Because of the relationship that all Japanese have with each other, trust and loyalty are all seen amongst the different groups and business markets. This is usually a reason why Japanese business men do not trust people who are not in their entourage; i.e., foreigners (8). Japanese business is very service oriented. In a study made about Japanese business culture, where the writer is writing on personal experience, an example on how and why business is so service oriented is used. When a westerner enters a business in Japan the people are very polite, the security smiles at everyone and the people welcome and thank any client who enter and leave their stores. (7). For foreigners, It can be mistaken for politeness, however “Agreed Japanese society is very polite but all of the people noted above were doing their job when you encountered them - a big part of their job is keeping you happy and in Japan that entails good customer service” (7). This demonstrates the high value that the Japanese place on customer service. There are two main features of Japanese business that make it so successful. The first is the “interlocking structures of manufacturers, suppliers, and distributors, known...
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