Gaishi: The Foreign Company in Japan

Gaishi: The Foreign Company in Japan

Gaishi: The Foreign Company in Japan

Gaishi: The Foreign Company in Japan

Excerpt

American businesses cannot be faulted for their lack of adventurousness when it comes to participating in foreign markets. Today one sees Americans doing business in such distant places as Southeast Asia, India, Africa, and the Middle East. Indeed, in many respects, American business is exemplary in its willingness to deal with different cultures.

Japan is the exception. Americans have proved extremely conservative, even defensive, in their efforts to penetrate the Japanese market. A number of years ago, the consulting firm Booz, Allen, and Hamilton studied direct foreign investment in Japan and found that Americans were passive about investing in the Japanese market for two reasons: the sheer complexity of doing business in Japan and the lower short-term profitability of the Japanese market when measured against average corporate profitability expectations.

A vicious cycle is operating here. The Japanese business environment is difficult to break into, so American businesses take a conservative attitude. The result is a wors-

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