Last Updated 06 Jul 2020

Compare and contrast business systems

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Almost no one can deny that the economic development of East Asia can be regarded as one of the world’s most pleasant surprises over the past forty years. In Japan, its dramatic economic growth occurred after the recovery of World War Tow. From 1950s to 1960s, Japanese economic rate grew over 10 percent each year. In the beginning of 1960s, such as South Korea, Singapore and Taiwan, all of them began to take off, even with faster rates than Japan. Considerably later, from the end of 1970s, China, particularly in South China, also began to show a sign of hyper-growth and even until nowadays (Edward C and Gary G.H, 1996, pp1).

More surprised, those countries sustained their rapid growth so that they even had a better performs than their counterparts in Europe and Americas during the recession (The World Bank, 2009). To understand this consequent, typically, Japan and China can be chosen as two representative examples to analyse the different business systems in these counties. Before analysing their system, the definition of business system needs to be explained – ‘a complex adaptive system in which the business component of a society is analysed against the context of that society’ (H Hasegawa and C Noronha, 2009, p 10).

According to this conception, a comprehension of their cultures and social systems is required. Clearly, China and Japan have a share in their many similarities because of their geographical proximity. As a result, to some extent, they have many similar features of their religions and value systems that reflect their long and rich cultures and great senses of national identity. However, with the different development of recent history of these two countries, it leads to two totally distinct modern civilizations. These differences can be traced to their different business cultures and different evolutions of their economic patterns.

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From other perspectives, during the period of transforms of their economic systems, it is easy to conclude that the governments of them played very significant roles in helping domestic industries grow fast and integrally although these reforms occurred in different periods by different paths. This essay will focus on contrasting the differences about business culture, interrelationships of companies and then comparing the same features of business systems in Japan and China such as similarities of government roles and focuses. In the end, it will evaluate contemporary opportunities and threats of Japan and China.

At the beginning, the differences on business culture should be mentioned. A cultural communication between Japan and China has stretched back thousands of years, so the typical behaviors of East Asian people can be seen both in Japan and China, such like harmony with others and the environment, more conservative than Europeans, whose behaviors are based on Confucian values (Li & Putterill, 2007, p148 ). However, because of the different experiences of two countries, especially in their recent histories, two distinct modern cultures have been formed.

Also they have different business cultures in their innovative enterprises. Although Japan has been under the strong influence of the business system in the US, it still keeps many characteristics of its business culture. Li and Putterill (2007) claimed in Japan, people prefer to keep silent rather than expressing. They regard their sweat more precious than praises from others. In Japanese, this feature is called “Moku-toku” which means the advantage of silence with a negative attitude toward the redundancy of tediously long words. So a hardworking and short-spoken man is more likely to be popular in Japanese society.

Likewise, a highly self-restrained character, particularly in business cases, is a significant standard for evaluation especially if there is a contradiction between individual benefits and the organization profits. Also, humility and modesty can be included in evaluating system. Moreover, a tacit understanding is expected in relationships with others. Most of Japanese believe communication from heart to heart is better than saying words. On the contrary, if a person has a great sense of eloquence, he will be considered a competent person in China.

To some extent, Chinese people are more direct than Japanese people in oral expression (Li and Putterill, 2007, pp 148-149). For example, if a Chinese employee thinks he received an unfair treatment, he maybe will communicate directly with his supervisor and ask for an explanation for him, which is more probable in China than Japan. In addition, in Chinese value system of business, if an employee always stays in silent, managers usually think he is incompetent and lack of confidence (Li and Putterill, 2007, pp 148-149).

While modesty is seen as an indispensable merit of a well-manned person, also, being modest is an essential point of business communication. Furthermore, different information exchanging styles in Japan and China caused different benchmark for evaluating performance. In Chinese companies, a great performance is usually based on a positive result of staff task, regardless of what efforts he had done. But in Japan, work hard is an absolutely need to receive an optimistic personal evaluation, because they believe a successful performance is a natural consequence of hard work (Li and Putterill, 2007, pp 148-149).

When people want to understand the business culture of China, a unique notion, “Guanxi”, cannot be ignored. “Guanxi is a personal relationship with a material gain in mind. ”(Yuan, 2005) Under a business atmosphere, how to maintain personal relationships with government officers and business partners is really important to executives of a thriving company, even they prefer to use “Guanxi” to make contract rather than the legal system. When comes to styles of management in these countries, bottom-up decision making system that has implemented in Japan very successfully varies themselves to Chinese management style clearly.

The bottom-up managerial style encourages the initiative and information flow from bottom to top level, which enrich the information pool of the top executive and help them have a more fresh view of their products and the situation of target markets. ‘Rather than serve as an important decision maker, the ranking officer of a company has the responsibility of maintaining harmony so that employees can work together. ’ (Dolan and Robert L, 1994) While Chinese business leaders have higher performance in direct decision making than Japanese (Martinsons and Davison, 2006).

Therefore, Chinese businessmen should change their mind of centralized decision making and encourage innovative ideas from lower managers. Having been affected by different culture of two counties, Japanese and Chinese economic institutions found different solutions to relieve crises when realized they had fallen into difficult circumstances, which caused different consequences. A far-reaching reform had taken place after World Wara? in Japan. The government decided to dismantle the strong power of Zaibatsu that controlled a significant portion of Japanese trade and industry even entered the political area to support their interests (S.Nan, 2011).

After that, another company form was reintegrated – Keiretsu that an interlocking business relationships and shareholdings among several companies. Both Zaibatsu and Keiretsu bring profound influence on intercorporate relations in Japan. The Japanese automobile industry is a good example of a kind of unique intercorporate trading in Japan. Compared with the top four American auto makers who buy 30 to 40 percent of their parts, Japanese companies occupy 60 to 70 percent of other corporations.

For more details, relationship with Japanese steel makers and auto manufacturers is a typical example of explanation of how they trade between separate companies. For example, Nippon Steel only sells its products to trading companies, and then those companies sell that steel to car manufacturers. It can be concluded that there are two distinguished traits of Japanese intercorporate relations. On the one hand, Japanese companies typically chose to make a trade with a specific small group of trading partners instead of many and unselected companies.

On the other hand, because the trading partners are fixed and have a long-term cooperation, the price of goods that is an extremely important factor of classical economic theory becomes a weaker influence than the trading partner (Hiroshi, 1996, pp178-181). However, in a sense, it is harmful to the development of medium-sized and small enterprises to enter the entire business system and compete with those companies that already have a stable relationship with some particular business partners.

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Compare and contrast business systems. (2018, Apr 15). Retrieved from https://phdessay.com/compare-and-contrast-business-systems-2/

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