A truly global HQ – where Japan is just one of the regions?

Japanese companies such as Fast Retailing and Rakuten are adopting English as their corporate language.  In reaction to this, various surveys of Japanese employees’ attitudes to speaking English appeared in the media, including one that showed that 73% of Japanese are reluctant to have English as a corporate language.

Adding to this, another survey released by the Sanno Institute of Management found that 67% of the businesspeople did not want to work abroad.  The conclusion drawn by many Japanese commentators is that this is all part of Japan’s withdrawal from the globalized world. In particular there is a worry, shared by the Japanese government, that the younger generation have become more inward looking and cautious, and this will have a negative impact on the economy.  My personal conclusion is that these reactions show that Japanese people rather enjoy agonising over surveys about themselves, particularly if the results show how different Japan is or are in some way a cause for gloom.

It seems to me any such trends are more related to economic factors than anything peculiar to Japanese society.  There is not the urgency to rebuild the Japanese economy through export led growth that there was in the post-war decades.  The slow death of lifetime employment means that younger people are less loyal to their companies and therefore less willing to go wherever their employers tell them.

Japanese companies have adapted over the past twenty years to the changing global environment.  They expatriate fewer staff to the expensive developed world, relying on local managers instead, and have turned their attention to investment of capital and personnel in emerging markets.

The same trends can be found in the matured economies elsewhere in the world.  The US used to have a mobile workforce, who would pack up and move state in search of a job, but apparently this is less true now, despite the persistent unemployment problem there.  And although Europeans love pointing out how only 20% of Americans have passports, compared to 70% or so of the British population for example – it is noticeable how most of the migration within Europe is from Eastern Europe, rather than from Western Europe.

Rather than force reluctant Japanese employees to transfer abroad or adopt English as a corporate language, many Japanese companies are trying to globalise by encouraging employees from Asia to transfer to Japan or hiring Asian students who are studying in Japan.  I suspect the expectation is that these employees will have to blend in as much as possible, however, so the impact on the Japanese staff in the headquarters will be minimal.

The worry then is that the non-Asian part of the business will become increasingly disconnected from Japan and Asia, with very little exchange of staff between the two regions.  A radical solution might be to accept that the majority of Japanese staff prefer to focus on Japanese domestic sales, and split the Japanese domestic side from the global headquarters.  This headquarters could be situated anywhere in the world, and yes, the working language will probably be English.