Business communication is a vital part of human life. Observance of ethical norms in entrepreneurial communication is recognized as essential in terms of business people’s responsibility to society and themselves, necessary for the efficiency of production. Various values of national cultures cause peculiarities in doing business with partners from different countries of the world. An essential role in an enterprise that wants to expand in international markets is also played by understanding the business methods of a particular country and the economic perspective. Thus, it is required to establish cultural differences, costs, and methods of conducting business in Japan of Russia.
The first distinction is punctuality; in Japan, being on time for a meeting means arriving 15 minutes early. This applies to everyone, even top executives who use the subway to be on time for appointments. Employees are registered when they arrive at work through access cards, and appearing at work just a few minutes before the official time is considered lateness (Samuels, 2019). In Russia, however, it is customary for subordinates to wait for their supervisor, who may not come to the meeting on time. It is also important to note that the Russians and Japanese perceive the concept of loyalty differently [A1] (Ershova, 2017). The Japanese often choose one occupation and one company throughout their professional life. They will work for this organization until they retire, and only something extraordinary can change this.
On the other hand, Russians are more practical and can change their choice depending on the quality of the offers provided. The president of the cosmetics company “Shiseido” said that after his firm signed a contract with a Russian distributor, he received many phone calls from his competitors (Ershova, 2017). They wanted the arrangements to be concluded with them. However, the Japanese businessman is not one of those who change partners. The decision-making process in these countries is also different. The Japanese are more democratic and tend to reach decisions by consensus, and they value outside opinions. Therefore, for example, Russian companies can refuse to sign a contract with the Japanese side because the Japanese people spend a lot of time making decisions (Ershova, 2017). Thus, firms from Japan and Russia that want to establish business relations need to investigate each other’s cultural specifics of doing business and respect them.
The Cost of Operating a Business
Most of the economy of the Land of the Rising Sun is based on small and medium-sized businesses. Owners register a legal entity to run their operation, considering the nature of their business and personal capabilities. The cost of starting a closed limited liability corporation with a capital of three million yen is ($26,800). At the same time, a limited corporation requires a minimum registered capital of 10 million yen ($89,500) to open (Price, 2018). The taxation system in the Land of the Rising Sun includes the following percentages: 22-30% income tax; 20.7% local income tax; and 9.6% business income tax. According to information provided by the Ministry of Health, Labor and Welfare, in 2019, the average salary in Japan was about 3150 USD. The price of the state duty for opening a state registration of legal entities in Russia is $46.65 (Samuels, 2019). Moreover, the cost of state duty does not change depending on the region.
It is essential to note that there is a simplified system of taxation; the rate is based on the amount of annual income and the number of employees. For example, if the company’s revenue is $ 17,000 and the number of employees is up to 100, the rate will be 6% (Szakonyi, 2020). Similarly, there is an “income Less Expenses” system for firms where business costs are more than 70% of profits in Russia. Then if the company’s income is $17,000 and the employee counts to 100, the rate will be 15%. At the same time, it is interesting to indicate that the average salary in Russia in 2019 is almost 600 USD (Szakonyi, 2020). Therefore, it can be concluded that the cost of doing business in Japan is much higher than in Russia. At the same time, because of the significant technological and economic progress, business profits are also greater in Japan. It is significant to mention that if companies want to develop foreign markets, they should study in detail the corporate registration legislation and the taxation scheme to assess the profitability of the business.
Japan is the second most advanced economy globally, third in nominal GDP, and fourth in PPP. Japan’s economy ranked 28th in the world in GDP per capita in 2018. The country is one of the most innovative economies in the world, with the largest electronics industry and patent surveys. However, the Japanese economy [A2] faces stiff competition from China and South Korea. Japan has a revenue of $1.739 trillion from spending $2.149 trillion (Samuels, 2019). The nation’s foreign reserves are estimated at $1.264 trillion. The Japanese economy has experienced numerous problems, such as bad debt, resulting in slow and unstable growth and inadequate natural resources due to unfavorable mountainous terrain. Japan’s population is mainly composed of the elderly due to a low birth rate, hence the concern about the future of Japan’s labor force (Samuels, 2019). Thus, despite its high economic development figures in the future, the state may face a decrease in workers and displacement from international markets by China. Consequently, Japan needs to attract a new workforce from other countries and enhance the electronics industry.
Russia’s economy ranked 6th among the world’s countries and 2nd among European countries in terms of GDP at PPP, which is estimated at $4.097 trillion for 2020. Although, Russia’s inflation accelerated in 2020 amid ongoing efforts to curb high demand, rising commodity prices, and supply problems (Szakonyi, 2020). The Bank of Russia was one of the first central banks to begin monetary tightening in 2020. This was a consequence of inflation exceeding the established target in 2020 (Szakonyi, 2020). At the same time, the adoption of economic sanctions by the EU and the U.S. indicates that Russia may be economically isolated in the future. Thus, Russia needs to stop inflation and negotiate with European states in order not to be completely isolated.
Techniques of Conducting Business
In terms of marketing and sales, the Japanese market is completely different from the one to which business people in European countries or Russia are accustomed; primarily, marketing is a tool to increase sales. However, the processes are different; B2B sales and marketing in Japan are conducted through networking events, which challenges most Russian brands, which define this approach as “the multifaceted nature” of the Japanese sales process. In addition, business in Japan is always centered around organizing networking events (Samuels, 2019). In Japan, companies organize cocktail parties for personal and honest communication. In Russia, on the contrary, solving business issues occurs in a working atmosphere and at meetings in the office. Another peculiarity of the Japanese way of doing business is special attention to the regions and their products.
The production which has proved itself well in the local market is then successfully expanded. In Russia, prominent entrepreneurs try to enter not only the Russian market but also the international market at once (Ershova, 2017). Thus, the methods of conducting business between the two countries are radically various. For companies to establish a partnership, they need to research the business activities of a particular state and support their practices of doing business.
Hence, Japan and Russia refer to different cultures; therefore, to conduct a successful business together, they need to study each other’s business rules additionally. Although, it is worth noting that even though Russia has lower costs for business, it is more promising to invest in the Japanese industry. This is because Japan’s economic and technological development enables it to compete with its major competitors and provide a stable income for private and public companies.
Ershova, N. (2017). Investment climate in Russia and challenges for foreign business: The case of Japanese companies. Journal of Eurasian studies, 8(2), 151-160.
Price, J. (2018). Japan works. Cornell University Press.
Samuels, R. J. (2019). The business of the Japanese state. Cornell University Press.
Szakonyi, D. (2020). Politics for profit: Business, elections, and policymaking in Russia. Cambridge University Press.