Article written by Olivier van Beneden.  

Why is reporting so important in Japanese companies?

Information sharing and reporting is often a cause of friction in Japanese companies. Here is one extreme example that shows just how serious the implications can be.

A Japanese company in the Netherlands appointed their first European CEO (previous CEOs were Japanese). This person, let’s call him John, had only worked for American and European companies previously. Soon after his appointment, the amount of information shared with Japan started to decrease. The HQ in Japan and Japanese expatriates working with John had to constantly ask him for information. They felt that they did not know exactly what John was working on and did not understand why he was not more open. Meanwhile, John was growing more and more frustrated about what he felt was micromanagement. He said: “As long as my numbers are good, and they are, why don’t you just let me do my work! I know the European market well and we have been improving our market share since I joined.” The relationship between John and the Japanese HQ deteriorated and the company eventually let him go.

This example illustrates the differences in reporting and information sharing expected in Japan and in Europe. For Europeans who are used to working independently, being asked to report regularly or having the feeling that someone is watching what we are doing, can, sometimes, be perceived as micromanagement. The higher we are in the hierarchy, the more autonomy we expect.

If the new CEO had been Japanese instead of European, he would naturally have kept reporting regularly and automatically to HQ. There is a word in Japanese language which explains this very well: Horenso.

Literally it means spinach but in business it is the contraction of three words:

•           Hokoku: to report

•           Renraku: to communicate

•           Soudan: to ask advice 

When entering a company, Japanese people are thrown into the Horenso environment and it is part of their training as a new employee. It becomes second nature to all employees who practice Horenso on a daily basis. Therefore, the Japanese colleagues expect all European employees, including the CEO, to use Horenso.

Below is an example which further highlights the importance of understanding cultural background as well as some tips on how to avoid unpleasant situations such as the one described above.

Group vs. Individualism: Due to the group-orientation of the Japanese, information tends to be shared regularly and among a large number of people. Job responsibilities and content are very vague (many employees in Japan don’t have a job description and if they do, it is often very vague.) By contrast, in Europe, we tend to be much more individualistic, and we don’t feel the need to share information with so many people and so often. As the work and responsibilities are much more segmented (clear job descriptions), we are less concerned about what our colleagues are doing and tend not to put so many people in copy in e-mails, for example. Just as we don’t want to be put in copy of information not related to our work (no time to read those e-mails!).

Bottom-up vs. Top-down hierarchy: Where the level of hierarchy in Europe might vary a lot from country to country (Netherlands being very low, France high and Belgium somewhere in the middle), the type of hierarchy here is always a top-down hierarchy. That means that the employee, usually, waits for his/her boss’s instructions before doing anything. That is also true for reporting. We will only report if asked to. And if the manager wants to know the status or the progress, he/she will have to ask to his/her employees. In Japan, there is a bottom-up hierarchy, which means that the employee will report automatically to his/her boss without being asked.

Process vs. Results: In Europe, we are less process-oriented than in Japan, and we tend to report only when the task is finished (which is the result) or if we encounter a problem we cannot solve on our own. In Japan, it is normal for all employees to keep their boss informed on progress (which is the process), through formal or informal reports, throughout the development of the tasks assigned.

Words of advice:

For Japanese: Japanese should try to explain the importance of Horenso as it is not natural for us. More importantly, practice what you preach: share information naturally with your team - they will be much more inclined to do the same with you. Last, try limiting the number of people in copy when e-mailing, for example. When in doubt, ask the person if s/he wants to be put in copy.

For Europeans: Europeans working in a Japanese company should understand the concept of Horenso and try as much as possible to stay open with information and report regularly to their management (It does not have to be a formal report. Just saying what you are working on over coffee works too.) This will help build a strong relationship with your boss. Especially as you grow in the organization, never forget the spinach! It is healthy!

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