Japan PLC can learn from hacker scandal

ON holiday in Japan last year, I was struggling to find a restaurant in the tangled nexus of Tokyo’s backstreets. Eventually, I asked a local for directions. He assured me that he knew where the restaurant was, setting off with a confident stride. After twenty minutes or so, he said he couldn’t quite remember where it was and began looking somewhat puzzled. Finally, after over half an hour, he admitted he hadn’t heard of it, and apologised so profusely that it was embarrassing.

The same traits are evident in Japanese corporate culture. Following news of the hacking scandal that hit Sony, the consumer electronics giant denied the scale of the problem; then admitted things were much worse than it had initially thought; and finally came clean in a public mea culpa, replete with executives bowing in shame.

Anyone who has visited Japan will recognise the above anecdote: if you ask a local to help you, they will do their best to do so. The inclination to say “yes” to every request – even a difficult one – can bring huge advantages, both for tourists and capitalism. In Japanese factories, for example, the absence rate among men is around half that in Britain. If an employee is off sick for more than a few days, it is their colleagues – rather than management – who call round to the house and encourage them to return to work.

When it comes to public relations, however, the tendency to underestimate the scale of a problem in its early stages has been bad for Japan PLC. Toyota’s reputation has been badly damaged by its failure to own up to the severity of safety problems, while nuclear power station provider Tepco lost public trust by issuing scant and evasive statements in the wake of the earthquake that hit its Fukushima plant.

Amid all the talk of global homogenisation, it’s worth remembering that the interaction of local culture and capitalism is often problematic. david.crow@cityam.com