Market entry | Singapore | Japan | Southeast Asia

In the Press

From a Mono-culture Island Nation to a Multi-culture Island State.

Embracing Diversity for Business Success

by Tong, Founder WASABI Creation Pte Ltd

Published on Japan Chamber of Commerce & Industries

(JCCI) Magazine Nov 2019 Issue

Being a Singaporean business consultant with over 10 years of experiences working and living in Japan and Singapore, supporting Japanese clients in market entry to Singapore, I have always been observing the many differences in thinking, business practices, and cultural differences between the two countries.

From the start of my career in Kyoto as a fresh graduate, and until now, I have seen many situations where such differences in culture and value have become a significant hurdle in businesses dealings, as well as in the work place between Japanese and Singaporeans. Besides my own experiences, I often heard from other fellow Singaporeans about how hard it is to do business with or working in Japanese companies. Although they might have studied or worked previously, a few have changed their focus on other markets such as China, and Korea.

After many years of analysis, here are some of the key points I often share with my Japanese clients who are new in doing business in Singapore. Today, I would like to share them with you.

Diverse nature of Singapore’s workforce

Unlike Japan which is almost a monoculture society, people in Singapore come in different races, nationalities, religions, and background.Most Japanese go through the same education system, moral upbringing, social expectation, employment system, a common history, uniform culture and values. Hence, most Japanese know their roles, and behaviors expected of them from other Japanese people, such as in school, at work, at shops, and in public spaces. It has developed into many unspoken rules, and most Japanese understands and keep to these rules.However, the diversity of Singapore includes differences in birthplaces, races, religions, languages, education, values, practices etc. We have come together to build a nation and an economy by managing these differences. Therefore, it is important for Japanese expats to understand such differences in order to work with employees, partners, and customers to achieve business success in Singapore and the region.

Source: Ministry of Manpower, https://www.mom.gov.sg/documents-and-publications/foreign-workforce-numbers

One example is about foreign employees, who cover about 1/3 of Singapore’s population. While understanding the laws and regulation in hiring foreigners is important, a better understanding of your foreign employees will be useful in running a successful business together with them.

Have you ever wonder why foreigners come to work in Singapore? It is common for Japanese to travel to other prefectures for employment but working overseas is less common. It will be interesting to start thinking why the foreign staffs in your company decided to work in Singapore, far far away from their home countries.

While Japanese often do their very best to work for the company, putting the company in first priority, foreign employees usually work in Singapore, so that they can fulfill their own priority.

A Filipino engineer might be considering staying in Singapore long term and relocating his family in the future. A Malaysian restaurant staff might just want to earn and save enough to start his own business back home. A Vietnamese admin staff might be supporting her children through university in Vietnam, and plan to retire in Vietnam. A Chinese fresh graduate might be planning to work in another country after 2 years after getting some experience in Singapore. Everyone with different background, stages in life, educational level, etc, would have different reasons for choosing to work in Singapore. While it is import to achieve the company’s objectives, understanding the agendas for different types of employees would help them achieve their personal goals, as well as that of the company. There are many other aspects regarding working with a diverse workforce in Singapore. The best will be communication and try to gain better understood over time.

Singapore has stronger emphasis in contract than Japan

Partly due to the diversity of Singapore, a strong emphasis is made on putting agreements in a contract even for small business deals. This is so that each party will be bound by the contract in black and white, avoiding misunderstanding, and wrong assumptions due to differences in values, practices, and culture. Most importantly to protect oneself when the other party does not fulfill their obligations. As mentioned earlier, a monoculture society such as Japan creates a common basic understanding, basic common sense of what to expect from one another, and common business practices, even without the need for written rules.

However, as a young country, a culturally diverse society, and an ever-changing business landscape, only a legally binding contract with clear terms and conditions will be able to ensure each party to do their part as a promise.Take Singapore being a “fine” city for example, Inside MRT: Smoking (Fine $1000), Eating & Drinking (Fine $500), Flammable goods (Fine $5000), Smoking outside yellow box (fine $200). Anyone of any cultural background would not have much difficulty understanding these rules, and this is how Singapore is run as a country.

In the case of Japan, there is no fine for eating on the train, in fact, you can enjoy Ekiben and buy food & drinks in the comfort of the Shinkansen. However, Japanese will refrain from eating on a local train, and it is a big No No for eating while you are walking. All these are based on Japanese people’s “common sense”, which are only common to the Japanese. On the other hand, Japanese tend to rely on mutual relationship, and trust, and believe in private discussion and negotiations outside the context of the contract when issues arise. This could also be the reason by the ratio of lawyers in Japan is relatively low among the Japanese population.

Hence, Japanese companies might neglect the terms and conditions in detail just base on trust, until problems arise. The local partners would often insist on the black and white of the contract to protect their interest. The priory of maintaining a long-term amicable relationship could be secondary. The differences could be explained by a few reasons. First of all, Japanese usually work for a long time or spend their whole career in the same company, hence it is important to maintain a good mutual relationship for themselves with their clients and partners for the long term.

Source: Walkwalk SG, http://walkwalksg.blogspot.com/2011/07/guide-to-singapore-mrt.html

Singaporeans usually stay only a couple of years in each company, even for top managements and CEOs; they can easily change their job. It does not make sense to build a good relationship only to find that the person-in-charge the following quarter will be someone new. However, the same business contract will still be enforced. So whoever is in-charge of the project will just need to follow the contract to execute his or her duty to the company. Another reason is that Japanese often put their company and self as one, while Singaporeans can be more individualistic despite representing their companies. When Singaporeans’ individual identity is separated from that of their companies, it helps to put away human compassion, and simply go by the black & white to maintain their stance, for the benefit of the company.

Be careful with assumptions for unfamiliar concepts

Due to the very different environment in a foreign country, there are concepts that might not exist in Japan, adding difficulty to Japanese business people overseas. For example, I had encountered Japanese clients who came up a single business strategy targeting Chinese markets in China, Hong Kong, Taiwan, as well as overseas Chinese in Singapore, Malaysia, and Indonesia, assuming a single product and strategy would be applicable to Chinese customers in general. In fact, Chinese in China, Hong Kong, Taiwan, Singapore, Malaysia, and Indonesia are so diverse in terms of culture, languages, preferences etc. Most Indonesian Chinese don’t event speak Mandarin nor Chinese dialect. It is unwise to have a “one product strategy fits all Chinese” assumption.

Source: Souhu.com https://m.sohu.com/n/488212954/

While there are overseas Japanese around the world, there isn’t a significant overseas Japanese population like that of overseas Chinese. While there are many Japanese American in US, they are considered as Americans rather than Japanese, except for their Japanese looks and biological DNA. Hence, it is understandable that Japanese business people might lack the understanding of certain concepts such as the example of “Chinese & overseas Chinese market”, which does not exist in Japan.

One day a Japanese client told me that he doesn’t really understand the difference for the different types of Chinese. Here is my explanation.

Imagine a Japanese expat family whose children studies in Singapore Japanese School. They also have some local Singaporean friends and get to know some local culture. When they return to Japan the children would be slightly different from the other Japanese kids.

Imagine a Japanese expat family whose children studies in an international school. They also have some local Singaporean friends and many international friends. The education system, teaching style, way of thinking would be quite different from that of a Japanese school. When they return to Japan the children would be pretty different from the other Japanese kids.

Again, imagine this group of expats’ children decides to work in Singapore, have children, and become Singapore citizens. They still celebrate Oshogatsu, cook Japanese dishes at home, speak Japanese to their parents and English or Singlish outside. I believe these Japanese families are very different from those in Japan.

Finally, imagine such Japanese families are also existing in Indonesia, Thailand, USA, Europe, China, etc, in significant numbers, I am sure they are different from one another in terms of languages, way of thinking, preferences, and practices. Yet, they are still Japanese by race, who likes to eat rice and miso soup, and celebrates Oshogatsu.

Don’t just hire candidates just because they are Japanese speakers

Japanese companies overseas often hire Japanese speakers, for the convenience of communication with Japanese management in the overseas office and HQ in Japan. Japanese speakers are also expected to understand Japanese working culture and able to work harmoniously with Japanese management. Assuming there are 1% of the population in Singapore who can speak relatively good Japanese (JLPT N2 or N1 for example) for the job position available, Japanese companies are missing out on the 99% of the population for suitable candidates. These 99% of the candidates are going to other companies who could be your competitors in the same industry.

Japanese is a language that is easy to pick up but difficult to master, hence lots of hours are required to invest oneself in learning the language. It would be an extremely rare case to find an available candidate who has mastered Japanese language, and is also competent in IT, marketing, engineering, or other technical skills required for the position.

Source: Nihongo Plat, http://www.nihongoplat.org

It would be even more risky when Japanese lose its popularity as a foreign language. There has been a rise in Singaporeans picking up other foreign languages such as Korean, hence the chances of finding a good Japanese speaker in the future will be even lower. With the above reasons, Japanese companies overseas should take a more active role in localizing the overseas offices by engaging a larger pool of talents instead of limiting them to Japanese speakers.

Putting the right management staff in overseas office to work with local talents would be the key. Instead of long term employees from Japan HQ might have good knowledge and experience of the business, and have unquestionable loyalty to the companies, hiring new management staff outside the company or overseas with the relevant capability and experience for overseas business could be a wiser choice. This is because setting up business overseas is like running a startup, and established companies in Japan often lack of talents with a startup business mindset.

LinkedIn for Business Matching

LinkedIn has been the biggest social network for professionals and businesses in the world, however its popularity in Japan is still low. This could due to the culture in Japan, where it is uncommon to make one’s personal data public, to publish your resume online, and to boast your professional achievements publicly. However, connection is one of the keys for doing business overseas. Connection includes finding candidates for hiring, partners for collaboration, and customers for business deals. LinkedIn also helps in employer branding for the company.

Source: 99Firms, https://99firms.com/blog/linkedin-statistics/

LinkedIn has been a very useful tool for my company to make meaningful connections, as well as an effective tool for doing business matching for my clients, whenever my company is tasked to conduct market research, looking for partners, distributors, retailer, and customers for my clients.Besides understanding the functionality of LinkedIn, there are also techniques in reaching out and connecting to the right connections for your business.

One barrier is that some Japanese companies controls the social media presence of the overseas offices from Japan HQ. Without understanding the mechanism and benefit of LinkedIn, some overseas offices are not allowed to utilize and take advantages of the many useful tools LinkedIn can offer. In todays’ Internet world many things has gone direct. Instead of going through a travel agent, we book our flight and hotels directly online. Instead of buying from retail shops, we buy from the brands directly online. Same for making business relationships through LinkedIn.

Although one of my main businesses is to provide business matching to Japanese companies looking for local partners, distributors and clients, I would be most happy to see Japanese companies to become self sufficient in creating their own overseas business network online. While many international companies have adopted LinkedIn as part of their corporate strategy, it is only wise for Japanese companies to consider the benefits of this professional social media for business success overseas.