Episode #132: Do The Right Thing In Japan, Always

Reputation in business is critical. Being honest, law abiding and treating business partners in a fair manner is the best policy for enhancing our reputation. Japan is a hard place in which to get into trouble, but that doesn’t stop some from trying.

The obvious thing to avoid is crime. You are probably thinking this is not an issue, and hopefully you are correct. Surprising things happen though. I had met a fellow Aussie businessman socially when I was Consul General in Osaka and the next time I saw him, was in the pokey. As a word of caution, those unfamiliar with how Consulates work might imagine that their Government is somehow going to get the loved one out of jail. Sadly, the Consular vehicle won’t be backed up to the compound wall to spring their national. All Embassies will do is make sure you are treated equally under the law and inquire whether you would like them to let your family know you are now a jailbird in Japan.

In this case, my Aussie compatriot did not want his family informed that he had been nabbed by the store security for shoplifting a small value item from a major retailer. Nor that in his bag the police found a substantial wad of cash and a smorgasbord of illegal pharmaceuticals.

After conducting many prison visits to incarcerated Aussies, let me assure you, don’t wind up in jail in Japan. The sheer fear in the eyes of all those I visited was seriously scary. One drug mule, a hulking deckie on prawn trawlers, was so obviously terrified of his guard, it still lingers in my mind’s eye. I don’t know what the prison guards do to their charges inside the walls of the prison, but the terror it induced was palpable and unforgettable. Jail time in Japan is not aimed at redemption by the way - the purpose of the entire experience is punishment and that is a big difference from many Western countries.

No jail time for me, you say. Hopefully you are correct, but you might be juiced up having a big night on the town celebrating in Roppongi and a fight suddenly erupts with some fellow muscular revelers sporting crew cuts. You jump in to help your mate, things rapidly go south and the cops arrive to clean it up. If the fracas involves locals, then don’t imagine the cops to give any credence to your side of the story (“Hey, they started it!”) and expect the judicial system to take a similarly harsh view of your unseemly behavior. By the way, binge drinking Brits and alcohol and testosterone fueled Aussies with short tempers, in particular, be careful!

It might be social media that brings your reputation undone. Your good name can be trashed all over the internet very easily and quickly. Recently, I received a broadcast Facebook query looking for help in locating a bad debtor. “Amazed” didn’t even begin to describe my reaction, as I knew both small business parties. “Wow, this is going everywhere,” I thought and how damaging that was for the named business partner’s reputation. We are all so interconnected today, one simple posting can be shared and dispersed with speed and breadth. It may or may not be warranted but the damage is done all the same. Retribution for not paying your way and not having a meaningful conversation with your buyer can be very expensive. Tokyo is still a small village for foreign businesspeople and everyone knows everyone else, pretty much. Broadcast postings set off concerns about not getting paid which means future potential business evaporates as no or low risk reactions set in.

Another cautionary tale came about from a false Facebook address. If you have really upset someone and they decide to go after you, then the business social media environment is perfect for waging acts of revenge. The Facebook posting looked like it was real, had a really intriguing tag line and took me to the fake site, where the dirt was piled high. This site was bursting with this person’s alleged business skullduggery and their reputation was being shredded on the spot. It took me a moment to work out it was a fake posting, because it was so well done, but the damage to reputation must have been enormous. For a small amount of money, you can command Facebook to send out a promoted post to specific demographics. That provides a lot of scope for little investment. Again, dealing with people honestly and in a straightforward manner, saves a lot of time devoted to damage control and precludes reputation obliteration.

Paying your bills is always a critical thing in business but some people are too clever by half. They have worked out that when you owe a substantial sum of money the problem is now the other guy’s. Collecting the amount owed, if it is not mega, is costly and time consuming. Knowing it falls between too little to go to Court over and too much to ignore, they offer pennies on the dollar. In this circumstance getting something back seems better than getting nothing and you don’t want to waste a lot of management time on this bad debt from a bad guy. So, their trap is sprung and you get paid only a pittance of what you are owed. This is painful.

The perpetrator’s immediate issue around cash flow may be removed, but the long -term damage to reputation is not so easily unwound. Caveat emptor is always a popular policy in choosing business partners and due diligence is a compliance must these days. People check us out on Google and business social media, before they do business with us when the amounts are substantial. It may take years to recover from a blow to one’s reputation and the internet leaves a trail for all future business partners to see. A heavy price will be paid at some point and invariably at the worst possible time. Again, this is a small foreigner village in many ways, and word gets around.

Sticking smaller suppliers with 60 – 90 day payment terms is a favourite for some of the larger players. The irony is that the people who need free credit the least, extract it from those who need prompt payment the most. Why do listed companies worth billions stick it to small-medium businesses? Presumably, when you take all the creditors together and bundle up the total amount owed and push payment back another extra month, the additional interest on that total amount and the cash flow flexibility is worth it. In business and life, might may be right, but it does take the sheen off the brand and the firm’s reputation. As a small business owner, I find this “stiff the small guy” routine happens way too often. Basically when you are in my position, your choices are few if you want their business, but it does leave a bitter taste in your mouth and a negative view of these brand name companies’ ethics.

So what can we take away from this discussion? As we know, Japan is pretty amae (indulgent) with foreigners, however, let’s not get sucked into a false sense of security. Jailbird time here is no joke, so just don’t take the risk. Treat business partners with respect, pay your bills or come to a mutually acceptable arrangement. Don’t try and dud anyone, you will be generating enemies with powerful tools at their disposal. Social media is an instant killer of reputations, the stain is semi-permanent and very hard to erase. If you create an adversary on social media, hostilities could continue indefinitely and future business opportunities could close out

So let’s always do the right thing in Japan.

As the saying goes, “the radius of the circle of karma is shorter than you think”.