Business Hazard

As for business hazard, there are mainly two categories. One is economic hazard, the other is business one as the title says. The farmer is related to macro economies, which have much to do with political hazards such as government’s monetary policies, trades with foreign countries, currencies, the trends of stock markets as I mention a little in the political hazards. The latter is the one that focuses on the more specific sides of business. We can say that business hazards are the systems developed naturally in the course of doing business in one country.

I use more space to explain the business hazards in Japan since I mention the economic sides previously (economic hazard overlaps in both political and business hazards). If you start business in Japan regardless of as top managers or not, you will face those hazards. Japanese business is regarded as very unique worldwide. As often pointed out, the unique business systems are, for example, “Keiretsu System (strong ties among company’s groups)”, “Lifetime Employment System”, “Seniority Wage System”, “In-house Union” and so on. Among them, Keiretsu System is one of the most notorious systems in these Japanese business conventions to foreign countries. The companies in particular groups with the pivots of banks, trading houses or car manufacturers, trade with each other so intimately that others out of the keiretsu have almost no room to start business with the pivotal big firms and sub-contractors under the umbrella. This has often given criticism as high barriers to foreign companies that plan to enter the second largest markets in the world. Such keiretsu companies are usually tied up by finance including stocks and commercial transactions.

The system, however, has been collapsing in recent years. In the banking groups, for example, banks have started disposing of non-performing loans and selling the stock of the group companies especially for the financial restructuring efforts. As for manufacturers too, they have started dealing with cost-advantaged subcontractors for global competitions. Parents companies have increased the purchase of manufacturing parts from the part makers out of the group although they used to buy most of the parts inside the group.

As another system symbolizing the Japanese business, Lifetime Employment has also been collapsing. The recent gloomy conditions have driven Japanese companies to take up the touchy matters. Since personnel expenses account for big weight in all costs, they can't resist squeezing profits by dismissing employees. On the side of employees too, Japanese workers have started to change the attitudes toward the companies. Many Japanese salary men were happy to work for the same companies once before until they retired. The lifetime employment was taken as a matter of course. But, some workers have become aware that their skills are available only in the companies. It’s regarded to be important to develop careers by changing companies.

Beside the two symbolic systems, there are still a lot of business conventions which seem to be very strange for foreigners. This book is not an introduction book on Japanese business. However, if you are a business person staying in or work with Japanese counterparts, you have to comprehend Japanese business styles fully and keep carefully watching the trends despite the Japanese strange systems have been getting close to global standards. Especially, Japanese business has been changing so rapidly. So have business hazards.