Resolving Conflicts with the Japanese: Mission Impossible?

Reading Time: 32 min 

When Americans do business with the Japanese, conflicts are inevitable. The breadth and depth of differences between the two countries are enormous.1 Yet the effective management and resolution of conflict are critical to financial success, especially given the staggering increase in business interactions between Americans and Japanese.2 Unfortunately, efforts by each side to resolve conflicts are the most serious source of conflict. When conflicts arise between American and Japanese businesspeople, Japanese typically attempt to resolve them using methods that have proven successful in their own country, while Americans in turn use conflict resolution methods that are customary in the United States. The result is that the effort to resolve the original conflict actually aggravates the condition. Consequently, the participants must deal with this “metaproblem” before they can effectively tackle the specific issues of the original conflict. In this article, we explain some of the cultural mechanisms underlying the Japanese approach to conflict resolution and suggest ways that Americans can more effectively resolve conflicts when working with the Japanese. These insights and recommendations are based both on the experience of the authors, who have lived and worked in Japan for several years, and also on writings by primarily Japanese scholars about the conflict and behavior of their own people. The senior author has been involved in over fifty negotiations with major Japanese multinational corporations while working as the general manager of a Japanese consulting and management training firm. These experiences led to the initial insights that were developed more fully, based on the writings of Japanese scholars who have described concepts and psychological processes associated with conflict within the Japanese society. While Western scholars can describe Japanese behavior and psychology in terms that are easy for Westerners to understand, Japanese scholars often capture a purer description of the Japanese mind. These descriptions help get to the heart of not only how Japanese conflict behavior changes, depending on the situation, but also why it changes.3

Harmony Builders or Conflict Avoiders?

American managers are often surprised and baffled at the behavior of their Japanese counterparts. Often, the behavior they observe is counterintuitive to information they have gleaned from the popular business and academic press. Much of what appears in the academic and popular press on Japanese culture focuses on the concept of wa or group harmony.4

For example, when writers discuss Japanese decision making, they almost always point out the central role of consensus in Japanese organizations. In many cases, ringi sho, the formal document that all relevant parties must sign before a decision is implemented, is used as an example of the consensual decision-making process and the strong Japanese cultural norm of building harmony. Writers often point to Japanese corporate songs, morning exercises, and lifetime employment as concrete illustrations of the Japanese group orientation and the cultural value of group harmony. It is virtually always deduced that the end result of Japanese cultural values and norms is the achievement of harmony or wa. (See Table 1 for a glossary of Japanese words used in this article.)

Americans assume that harmony is on one end of a continuum and extreme conflict is at the other end. That is, the level of harmony in a firm is proportionate to the absence of conflict — the more harmony, the less conflict. Americans think that the Japanese are “designing in” harmony with work rules, managerial practices, reward systems, and so forth, all of which serve to build harmony among the firm’s members.

To Westerners, the first step toward building group harmony is conflict resolution. The second step is building a unified vision and set of values among the group members. Conflict resolution first, harmony second. Trying to achieve harmony before major conflicts are resolved not only exacerbates the conflict but seriously inhibits the eventual achievement of harmony. American managers, having read and heard that the Japanese are “harmony builders,” assume that the Japanese are also, by nature, “conflict resolvers.”

Imagine the surprise and consternation of Americans when their Japanese counterparts time and again refuse to confront conflict head on or even pretend it does not exist. To the Western mind, conflict avoidance and harmony achievement are mutually exclusive. For the Japanese, however, harmony, conflict resolution, and conflict avoidance are all means to another end; they are not desired end states in and of themselves. So what is this mysterious and desired end that harmony, conflict resolution, and conflict avoidance can, under different conditions, effectively achieve?

Obligations in Japanese Society

The end state most desired by Japanese in interpersonal relationships is a condition in which the incurrence of obligations is minimized and the flexibility in fulfilling obligations is maximized. Although all societies have rules regarding obligations — how they are incurred and how they must be repaid — few societies have rules as complicated, strict, and burdensome as the rules in Japan. For example, Americans feel obligated to others who have done favors for them. However, obligations in general are not an overriding behavioral guide on a daily basis. In Japan, however, obligations are a critical influence in daily behavior. The concept of on (pronounced “own”) lies at the center of interpersonal behavior in Japan.

On refers to the psychological and social debt one incurs upon receiving a favor or gift from another person. Engaging in any interpersonal interaction is likely to result in some sense of obligation. Often a strict set of behavioral expectations accompanies obligations, as in the case of weddings.

Managerial Obligations and Weddings

Consider, for example, the behavioral expectations linked to a wedding ceremony in Japan. When Japanese managers are invited to weddings, they incur obligations, which are reflected in the gifts they must give. When they attend wedding receptions, they must give a present of cash, not any other type of gift. The money gift must consist of unused bank notes, not ones that have been previously circulated. These notes are nearly always in denominations of 5,000 yen or 10,000 yen. The higher a manager’s company rank, the more the manager must contribute (ranging from 10,000 yen to 30,000 yen). The gift must be placed in a special envelope, not in a box or general envelope. There are certain decorations for wedding gift envelopes, and they vary for small, medium, and large money gifts. Large contributions cannot be put into envelopes designed for small contributions or vice versa. The cord around the envelope must be red and white or gold and silver, not red and gold or white and silver or purple and black or anything else. The gift must be presented to the couple on the actual day of the reception, not before or after. In return, the couple is obligated to give a gift, which must be an article, not money. The return-gift must be roughly half the value of the money gift, and it must be given on the actual day of the reception, not before or after. These rules are so prescribed that violations are viewed as serious gestures of ill will. It makes no difference how the bride and groom feel toward the giver or how the giver feels toward the bride and groom. The social rules of obligation must be obeyed or severe losses in trust and social status will be incurred.

Managerial Obligations and Chocolate

Whereas the concept of on is essentially the incurrence of obligations, giri is the moral force that compels Japanese to engage in the socially expected reciprocal activities even when they are not naturally inclined to do so. The consequence of not fulfilling these expectations is the loss of trust and support not only of the party directly affected but of any observers as well. Thus, every favor, no matter how small or insignificant, is remembered by both the giver and receiver, and they both calculate the appropriate reciprocation.

For example, the Japanese confectionery industry saw that importing the concept of Valentine’s Day could greatly increase candy sales, especially chocolate. The industry began a collective effort to promote Valentine’s Day and the sale of chocolate candy. It turned out that most of the chocolate was being purchased by women and given to men. Knowing that gifts received must be repaid in Japan, these candy makers then launched a second holiday a few days after Valentine’s Day, which they called White Day. They billed White Day as the day men could (and by obligation had to) buy white chocolate and give it to all those from whom they received chocolate on Valentine’s Day. The chocolate given back on White Day is commonly referred to as giri choco, “duty chocolate.” Young, single, and popular male managers usually dread this time each year because they may receive Valentine’s Day chocolate from ten to fifteen young “office ladies,” all of whom must be given chocolate on White Day that exceeds the value of the chocolate given on Valentine’s Day. For a Japanese businessman, the total chocolate purchases for White Day can exceed a hundred dollars.

Pervasiveness and Severity of Obligations

These examples illustrate the pervasiveness of obligations in Japanese society. Few things can bring greater shame on an individual than the failure to repay an obligation. In fact, there used to be a law in Japan that made it illegal to save a stranger’s life because of the intense obligation and repayment owed to the rescuer. It was viewed as being better to die than to have to continually try to pay a debt that could never be fully paid. Thus the first aspect of the desired end state in interpersonal relationships is the minimization of the probability of incurring obligations.

Conflict in general can be a significant source of obligations. For example, if a conflict arises between two Japanese businesspeople during negotiation of a service contract and one party gives in on the length of the service period, this is not necessarily a loss for the person who gave in or a victory for the other party. The process of giving in often puts the other party in debt to the person who gave in. Similarly, even if the conflict concerning the length of the service contract were resolved through a compromise, the individual who gave up the most may in the process have created in the other party the greater obligation. Thus, given (1) the pervasiveness of obligations, (2) the strict rules that govern their incurrence and execution, (3) the probability that conflict will lead to obligations, and (4) the penalties for failure to repay obligations as prescribed, it is not surprising that Japanese in general do not want to incur extra obligations and see conflict as a very real threat to the minimization of obligations.

Preferences and Processes

We can use these concepts to map Japanese preferences as they relate to conflict (see Figure 1). The arrows indicate the general direction in which Japanese prefer to move. The most undesired state is the complete absence of harmony: there is visible conflict, there are many differences in how to proceed, and there is low goal congruence. These are likely to result in undesired obligations. The primary processes to get out of this condition are hiding differences and avoiding conflict.

If you hide your differences and avoid conflict, you will still have those differences, but they will not be so visible to outsiders. Therefore, you will likely incur fewer obligations. This is a much more desirable state. However, the fact that real differences exist, even if they are hidden, makes this condition unstable over the long run. At some point, efforts to hide or avoid the differences will probably fail; the differences will become visible, compromises will be made, and obligations will be incurred.

Therefore, it is desirable to decrease the number of differences. One way would be to move directly to a state of harmony by openly resolving conflicts and building shared values. Although this will decrease obligations in the long run, it will probably increase them in the short run. Openly resolving conflicts will not only increase the probability of incurring obligations but it will reduce the flexibility concerning when or how the incurred obligations are repaid. Because open conflict resolution increases obligations and reduces flexibility, this method is not preferred. Therefore, Japanese would prefer to avoid conflicts and wait for the differences to diminish or even disappear over time. This puts them in a state of few differences and low goal congruence (partial harmony). That is, people do not necessarily agree on where they are going, but they have few differences on how to proceed; for example, there may be little congruence on the new marketing strategy but all agree that they should proceed slowly. This condition is quite acceptable. It is relatively easy to avoid unwanted obligations, and the fact that few differences exist between parties increases the probability that the semiharmonious conditions can be maintained over time.

The most desired condition, obviously, is complete harmony. There are few differences and high goal congruence. However, it is important to remember that partial harmony is an acceptable condition for the Japanese, and so there is no guarantee that, once this condition is reached, there will be continued movement toward real harmony.

The diagram in Figure 1 illustrates how the processes of avoiding conflict, resolving conflict, and building harmony can all serve as means to the desired end of minimizing incurred obligations. However, the desired state for the Japanese is not just minimization of obligations. To some extent, obligations are unavoidable. Consequently, Japanese also want to maximize the flexibility associated with obligation fulfillment. The more “slack” they can have concerning the timing and extent of obligation fulfillment, the better.

Contexts and Obligations

What conditions affect the flexibility of obligations? The answer lies in the relationship among contexts, behaviors, and obligations in Japan. Scholars have described the Japanese as a high-context people; that is, the behavior of Japanese is highly dependent upon the situation and its circumstances.5 For example, Japanese use three different types of speech (including different verb conjugations) when speaking to supervisors, peers, and subordinates. By contrast, America is a relatively low-context culture; Americans use very similar speech with supervisors, peers, and subordinates. The relevant contextual dimensions for conflict resolution in Japan are uchi-soto and omote-ura.6

Uchi and Soto

Uchi (“in”) and soto (“out”) refer to the perception and structure of in-groups and out-groups. All societies, of course, have norms dictating how individuals are included in or excluded from different groups. One difference between Japan and America is the rigidity of the boundary between groups; it is much more difficult to move between in-group and out-group status in Japanese organizations. For example, in the United States, it would not be considered unusual for a thirty-year-old manager to meet with her fifty-year-old division manager, who is one level above her own manager, regarding company matters. In Japan, such a meeting would rarely take place, due to age, rank, gender, and status differences. In the United States, there is a more general belief that individuals have the right to be treated equally despite differences in status and rank — in Japan, no such expectations exist. Although it is beyond the scope of this paper to discuss all the criteria that mark the boundaries between in-group and out-group status, some of them are age, university attended, rank, seniority, gender, and family.

Compared to Americans, Japanese are much more conscious of in-group and out-group status. These distinctions have important effects on what is considered appropriate behavior. For example, a group of employees in their twenties would behave much more informally among themselves than with employees in their thirties, even if rank and other differences did not exist. These Japanese behavioral norms often confuse Americans. To Americans, Japanese may seem like chameleons because their behavior changes so much more radically in response to context. Americans often make negative attributions to this behavior, labeling it insincere, dishonest, and two-faced.

The classification of another individual, group, or organization as inside or outside in large part dictates the flexibility and fairness one can expect with respect to the repayment of obligations. In general, Japanese believe one can expect much more slack, understanding, and flexibility in interactions with in-group individuals. Also, one can expect in-group individuals to recognize and honor obligations they incur. The same confidence cannot be placed in out-group individuals. If one cannot expect outsiders to recognize and honor obligations they incur and to grant flexibility in the execution of obligations, then the smart thing to do is to avoid conflict with them. Such conflicts are likely to result in inflexible, unrecognized, or unhonored obligations in the short term.

Omote and Ura

Unfortunately, the concepts of omote (“front region”) and ura (“back region”) have no equivalent translations in English. Omote has to do with the behavior, expressions, words, policies, and so forth that an individual or firm expresses to the public. It connotes formality, legitimacy, and rigidity. Ura, conversely, has to do with behavior, beliefs, attitudes, and policies that are privately allowed and tolerated. It connotes feelings and expressions that are informal, flexible, and private. For example, a Japanese worker is compelled publicly to say that he has a fine boss; privately he can explain how incompetent his boss is.

Public and private are not dichotomous notions but dualistic, and they are necessary for Japanese society to function. For example, reimbursing clients for stock losses may be strictly prohibited — publicly. In a private context, there is flexibility in the rule’s interpretation and application. In this way, private relationships work as safety valves to ease societal tensions. To put it another way, by using the private context, the society can be flexible in the administration and execution of obligations.

However, some situations by their nature are more public or private than others, and there are limits on the extent to which situations can be manipulated in one direction or the other. For example, a formal planning meeting is more public than an informal chat in the hall. The major implication of public-private contexts for obligations is that there is much less flexibility in the repayment of obligations incurred publicly than in those incurred privately.

Again, although all societies possess these principles, Japan is somewhat unique in the degree to which its culture permits the boundaries between the two dimensions to be fluid. Certainly Americans believe that “rules are made to be broken,” but only if the implications of breaking those rules are utilitarian (e.g., the greater good for the greater number). If not, Americans believe in the inviolate nature of laws, contracts, promises, and so forth; they consider inconsistency between public and private codes of behavior hypocritical, devious, and perhaps illegal. The Japanese view such inconsistency as normal.

Thus in the strictly public contexts, conflict (especially visible conflict) is to be avoided because there is much less flexibility in the execution of any obligations incurred. In private contexts, there is more flexibility in the execution of obligations. Consequently, resolving conflicts is easier and more likely to happen in private.

For example, White Day was so successful in large part because the incurrence of the obligation was made in public. Advertisements in the newspapers and on television and radio explicitly pointed out that White Day was an “opportunity” for the men to repay the kind gesture of chocolate they received from the women. Because the obligation is incurred publicly, there is much less flexibility in repaying it than if it were incurred privately.

By combining these concepts, we can gain a more comprehensive understanding of conflict resolution in Japan.

A Matrix of Contexts

Figure 2 is a matrix showing how the public-private concept and the outside-inside concept work together. The matrix is fairly self-explanatory, but it is worthwhile to briefly examine each cell. This allows us to outline a general strategy for conflict resolution with the Japanese. Although the matrix could apply to interpersonal, intragroup, or intergroup conflict management, joint ventures between Americans and Japanese are particularly useful in illustrating how the matrix works.

Cell 1: Soto-Omote

This cell involves people who are outsiders and who are in a public situation. An example might be the formal meeting between a Japanese firm and an American firm, formerly competitors but now interested in a joint venture, at the head offices of one of the firms. From the Japanese perspective, the Americans are outsiders. Consequently, they cannot be trusted to recognize or honor implicit obligations (not to be mistaken with legal or contractual obligations) or to provide much flexibility concerning obligations incurred by the Japanese. Additionally, the “publicness” of the situation also reduces the flexibility in fulfilling obligations incurred, independent of the other party’s intentions. These factors combine to create a strong incentive for the Japanese to want to avoid conflict, especially visible conflict.

One of the most common complaints from American negotiators in such situations is the vague response they receive to what the Americans see as important, direct, and straightforward questions. But to the Japanese, vague responses achieve several purposes. Direct responses may make the parties’ differences explicit. Once these differences are in the open, the Japanese may need or even want to make compromises, which often carry implicit obligations for both the Americans and the Japanese. However, the outsider Americans are unlikely to recognize and fulfill their obligations. They also cannot be trusted to provide much flexibility should the Japanese incur any obligations. Thus, it is likely that a negotiator for a potential Japanese joint venture partner will state the company’s purposes in joining the alliance in vague and very broad language and will avoid direct responses to questions.

Silence, of course, is the ultimate vague response. Usually this silence is coupled with a hissing sound as air is sucked in between the teeth. In silence there is no compromise, no conflict, no incurrence of obligations. From the Japanese perspective, silence is a very common and appropriate response when dealing with outsiders in public situations.

The trip by President Bush and several American chief executive officers in January 1992 is a good example. President Bush and others in his delegation wanted to have frank and open discussions of the trade conflicts between the two countries in an effort to resolve the differences. The Japanese announced virtually no new concessions and generally responded in vague platitudes. The vagueness of these statements became more evident weeks later when what Americans thought were firm pledges to increase purchases of U.S. automobiles and parts by billions of dollars were “clarified” by the Japanese as simply pledges to investigate the possibility of such purchases. As outsiders, the Americans could not be trusted to recognize obligations they incurred, nor could they be trusted to be flexible regarding obligations incurred by the Japanese. Furthermore, the public context further reduced any flexibility in fulfilling obligations.

Cell 2: Soto-Ura

This cell involves people who are outsiders in a private situation. For example, representatives of the American and Japanese firms considering a joint venture might meet at an exclusive restaurant instead of the head office. The Americans are still outsiders, but the privateness of the restaurant allows for some flexibility regarding obligations. Very small doses of conflict may be tolerable because relatively smaller risks are being taken with respect to obligations.

Japanese will commonly respond to this type of situation with what might be termed incrementalism. This is really a particular form of compromise in which the movements in the give-and-take process are so small that any given individual point of compromise would be almost unnoticeable, and thus the associated obligations would also be small. Part of the reason so many Americans have complained about the time it takes to negotiate joint venture agreements (or most any agreement) with the Japanese is incrementalism. As time goes on, the Japanese can evaluate the extent to which the Americans recognize and honor their incurred obligations as well as the extent to which they extend flexibility to the fulfillment of obligations incurred by the Japanese. If the results of these observations and movements are positive, trust begins to develop, and gradually the Americans are seen less as outsiders. This change increases the willingness of the Japanese to resolve the points of conflict and move toward harmony.

Cell 3: Uchi-Omote

This cell involves people who are insiders in a public situation. For instance, a Japanese firm and an American firm with past strategic ties might get together to form a new joint venture in a very visible, formal meeting. Because of the past involvement, the Japanese consider the Americans insiders, especially if the individuals involved in the negotiations have had extensive interactions with each other in the past.

In this context, Japanese commonly focus on issues they know in advance are points of congruence rather than conflict. Often Americans may see this as a waste of time because it is the points of difference that are blocking progress or inhibiting completion of the proposal. Americans often want to focus first, and most intensely, on resolving the major differences. However, to the extent that the situation is public, the Japanese are much more likely to focus on the common ground and be very slow to take up issues of difference.

Cell 4: Uchi-Ura

This cell involves people who are insiders in a private situation. For example, the partners in the previous example might meet in a more private setting, such as a club, golf course, or restaurant. There will probably be fewer individuals in the meeting. This situation may not minimize the probability of incurring obligations, but it maximizes the flexibility and fairness of fulfilling obligations incurred. This allows for more direct approaches to conflict resolution but does not mean that conflict is necessarily desired.

Few Westerners have seen negotiations among insiders in private settings in Japan, perhaps for no other reason than Westerners are, almost by definition, considered “outsiders” by Japanese. Thus Westerners often mistakenly believe that Japanese never use direct or confrontational approaches to conflict resolution. In fact, Japanese often take very direct approaches to resolving their different opinions in this situation. They explicitly point out the major differences among group members and make direct demands, rejections, and counteroffers.

One of the authors experienced this quite dramatically while working in Japan. The author was involved in the renewal and renegotiation of a consulting contract. He met one-on-one with the lead person of a longtime client firm. The discussion was conducted in Japanese, in a private room. The major issues were the price for new services and the criteria and assessment of performance of these new services. Instead of using the wording more typical of public meetings, the Japanese client stated in unambiguous terms that the proposed price was too high and the criteria were too soft. The author replied in equal frankness that the price desired was below industry norms and the criteria demanded would be impossible to meet. The discussion continued at this level of candor until a compromise was reached. This case, as well as others the author experienced, were great testimony that not only can the Japanese “say no,” they can say whatever else is on their minds without any traditional indirectness — as long as they are in a private situation with someone they feel is an insider.

Strategic Approaches to Resolving Conflicts with the Japanese

The Japanese approach to conflict is most dissimilar to that of Americans when the conflict is with an outsider in a public situation. It is most similar to that of Americans when the conflict is with an insider in a private situation.

Key Differences

From the Japanese perspective, most joint venture negotiations with American firms begin, almost by definition, in cell 1 (outsider-public). Although it is difficult to describe a negotiation style that is descriptive of all Americans, research provides an empirical basis for some generalizations.7 Overall, Americans tend to take a very direct approach to negotiation. They ask direct questions and expect direct answers. This tendency is illustrated by some common idioms: “cut to the chase,” “lay the cards on the table,” “get to the point,” “stop beating around the bush,” and “tackle the issue head on.” Americans tend to rely on logical persuasion as a means of influence, rather than personal relationships; they rely on legal contracts, rather than mutually developed trust, to assure compliance with the agreement.

But these behaviors and orientations are not congruent with the Japanese perspective in the outsider-public context. The Japanese deflect direct and confrontational negotiation tactics in this situation by responding with vagueness and periods of silence. Americans usually misinterpret this silence, assuming it means “no,” and this leads them to two mistakes. One mistake is to adjust the offer to make it more attractive. This adjustment may be premature; the Americans may be giving away more than necessary. Another mistake is to more forcefully try to persuade the Japanese to accept the original offer. This increased pressure often serves only to aggravate and entrench the Japanese.

Given the high probability that interactions between Japanese and Americans will take place in the outside-public context, and given that the typical conflict management tendencies of the Japanese are nearly opposite those of Americans in this context, the general strategy should be to try to manipulate the context rather than to try to change each side’s natural behavior. If the context can be made private and if the Americans can gain some kind of insider status, then the disparity in conflict resolution behavior can be lessened substantially.

Manipulating the Context

Some of the key processes for manipulating the context can be illustrated with the following real, but disguised, case. In a recent negotiation between a major U.S. university and a large Japanese chemical corporation, the team leader of the American group reported that he could never seem to get a straight answer to his simple question of what the Japanese firm’s principle objectives for the joint venture were. Without this knowledge, the American team leader felt that he could not proceed to other issues. After a couple of frustrating meetings, the senior author was called in as a consultant with the hope that fluency in Japanese and familiarity with Japanese-American negotiations would facilitate the process. In the next session, the American team leader again tried to get a clear response from the Japanese, and again the Japanese gave a vague reply. A break was called, and the American consultant got the Japanese team leader, president of the firm, away from the others. They discussed the Japanese leader’s interest in Japanese archery and the consultant’s interest in karate. Then the consultant mentioned that the American team leader was a little confused as to the main objective of the Japanese concerning the joint venture and that it would really help him, the consultant, if the Japanese could give a little clearer idea of what the Japanese wanted out of the joint venture. With that, the Japanese team leader replied that there was no single overriding objective and that is why he could not respond to the American’s request. However, the Japanese were interested in the opportunity of their scientists, especially junior ones, to “rub shoulders” with the famous scientists of the university and to learn some of the creative ways that American scientists solved problems. He felt that the junior scientists’ creativity was being suppressed back in Japan, but the presence of the Japanese R&D director made it difficult for him to reveal this at the negotiation table.

Talking to the Japanese team leader away from everyone else created a private situation. The private context allowed the Japanese leader to count on more flexibility in the execution of obligations and made it possible for him to indicate that he did not have a single objective and that one objective was a sensitive matter. The fact that the consultant spoke Japanese, had lived in Japan, and spent a few minutes discussing personal hobbies, like archery, moved him closer toward insider status. The Japanese team leader could trust that the consultant would recognize and honor any obligations he incurred and would be flexible concerning the obligations incurred by the Japanese.

  • Reducing the Number of Eyes and Ears. As this case shows, “publicness” is in large part a function of how many eyes and ears can see and hear what is going on in the negotiation. There is no fixed line that marks the boundary between public and private. In this case, the Japanese team leader and the consultant could be seen but not heard. Consequently, the easiest means of increasing the privateness of the situation is to reduce the number of eyes and ears that are involved in or even know about the discussions. Holding meetings in private locations can reduce publicity in the media, and one-on-one conversations can reduce the publicity with bosses or peers.
  • Breaking into the In-Group. There is also no fixed line between in-group and out-group status. Matching age, positions, experience, and expertise are all ways of reducing factors that could exclude. However, the biggest single key for Americans is being able to convey an understanding of Japanese culture in general and the individuals involved in particular. This usually takes some time. Often it is time at the front end of the interaction, or what the negotiation literature calls nontask time. The more Americans or their representatives understand Japan and the particular Japanese involved, the less time is needed at the front end to establish a sense of uchi or inclusion. The less that is understood and known, the longer it takes to establish a sense of inclusion and the longer it takes to resolve the conflict.

Tactical Approaches to Resolving Conflicts

It is not always possible to manipulate the context. Next we briefly discuss some tactical approaches to resolving conflicts when Americans cannot create an insider-private situation.

Outsider-Public Context: Third Parties

Conflict in the outsider-public context is extremely difficult to resolve. In this situation, the Americans may need to use a third party. The use of third parties is actually an indirect means of manipulating the context; certain types of third parties can be seen as relatively more inside than outside, even if the third party represents a group that is absolutely outside. The role of the third party is to reduce the real points of conflict over time so that once the two parties sit down with each other in the outsider/public context, there are few and only minor differences left unresolved. Obviously, for this to be achieved, the Japanese need to believe that the third party understands Japanese culture (which is greatly facilitated by speaking Japanese) and understands the particular Japanese individuals involved (which may require previous experience with the individuals or some significant nontask time at the beginning). Additionally, a single third party provides a buffer between the eyes and ears of the two sides. This reduces the publicness of the situation. What transpires between the third party and either side is out of direct view and hearing of the other side.

Outsider-Private Context: Incrementalism

Although the conflicts between Americans and Japanese are somewhat easier to resolve in the outsider-private context, resolving them remains problematic. Generally, it would be a mistake to think that the private context will allow the outsider to confront the Japanese directly or to rapidly make large advances in the negotiations. If the setting has simply shifted from the boardroom to the golf course, the best tactic for resolving conflicts is to be patient and to make — and try to extract — small changes and compromises. Furthermore, only a few of these small movements should be attempted in any one meeting. If the context shifts from a formal meeting to dinner at a private restaurant, only a few references to issues of difference should be attempted in the course of the evening. Additionally, it will be most effective if these issues are raised in a whisper between individuals of each side, thereby increasing privacy.

In general, situations of greater privacy should be viewed as opportunities to build relationships and work toward achieving insider status rather than as opportunities to maximize flexibility accorded to obligations. This is why the best tactic in the outsider-private context is incrementalism.

Insider-Public Context: Preparing the Way

Nemawashi is an effective tactic in the insider-public context. The term comes originally from a practice in gardening in which the roots of a tree or bush that was to be transplanted were cut incrementally so that the tree was essentially “removed” from the soil before it was actually “transplanted.” The belief was that this would substantially reduce the shock experienced by the transplanted tree or bush. Similarly, parties to a negotiation can slowly pare away at differences in private to make sure they do not surface during public discussions or negotiations. Thus, individuals from both sides might informally check out how the other side was viewing such issues as their expected financial contribution to the joint venture. Then, any difference could be narrowed incrementally until the gap was so narrow that when it was finally brought up at the formal meeting, disagreements would be small and easily resolved. Nemawashi is really an attempt to create a parallel private context in which differences can be confronted more directly.


We have attempted to delineate the organizational and managerial complexities involved in managing conflict between Americans and Japanese. Although the number of such interactions is escalating rapidly, the research shows that, unfortunately, there is no similar trend regarding the mutual understanding of cross-cultural differences. Many of the typical Japanese reactions, such as vague responses and silence, have been mentioned in various articles and newspaper stories; we have moved beyond a mere description of typical situations by providing a framework for understanding how Japanese view conflict. Most important, this framework points to several simple but effective ways of resolving conflicts with Japanese.


1. For example, see:

R.B. Peterson and J. Shimada, “Sources of Management Problems in Japanese-American Joint Ventures,” Academy of Management Review 4 (1978): 796–804.

2. For example, the United States Commerce Department estimates that Japanese investment in the United States has grown eleven times since 1980 and that U.S. investment in Japan has tripled in the same period; in 1989, Japanese investment in the United States totaled over $50 billion, while U.S. investment in Japan totaled nearly $17 billion. The automobile factories of Honda, Toyota, and Nissan in the United States or the new Corning plant in Japan are visible examples of this direct investment. Also, the number of Japanese and American firms that are forming joint ventures and strategic alliances is increasing at an exponential rate. From 1979 to 1985, such organizational collaborations increased 2,000 percent, and 79 percent of the joint ventures were between rivals in the same market. As an example, approximately 126 U.S.-Japanese joint ventures exist in the auto-supply parts industry alone. See:

M. Hergert and D. Morris, “Can Japanese-American Collaborate Agreements Succeed?” Business Forum 12 (1987): 20–22.

3. T. Doi, Amae no kozo [Anatomy of Dependence] (Tokyo, Japan: Kodanshita International, 1973);

C. Nakane, Tateshakai no kankei [Japanese Society] (Berkeley: University of California Press, 1970);

H. Minami, Nihonjin no shinri [Psychology of the Japanese People] (Tokyo, Japan: Tokyo University Press, 1971);

E.S. Krauss, T.P. Rohlen, and P. G. Steinhoff, eds., Conflict in Japan (Honolulu: University of Hawaii Press, 1984). This edited book contains some essays by Japanese scholars.

4. For example, see:

J. Alston, “Wa, Guanxi, and Inwha: Managerial Principles in Japan, China, and Korea,” Business Horizons 32 (1989): 26–31.

5. For example, see:

E.T. Hall, Beyond Culture (Garden City, New York: Anchor Press/Doubleday & Company, 1976).

6. T. Ishida, “Conflict and Its Accommodation: Omote-Ura and Uchi-Soto Relations,” in Conflict in Japan, ed. E.S. Krauss, T.P. Rohlen, and P.G. Steinhoff (Honolulu: University of Hawaii Press, 1984).

7. J.L. Graham and Y. Sano, Smart Bargaining: Doing Business with the Japanese (New York: Harper & Row, Ballinger Division, 1989).

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