Japanese firms are involved in numerous joint ventures across the world, especially with U.S. companies. The decision-making process of Japanese differs greatly not only from the U.S. process but also from many other countries, especially at the higher levels of their organisations.
An understanding of the Japanese decision-making process requires an understanding of Japanese national culture. The basis of Japanese working relationships can be explained by the principle of wa, which means “peace and harmony.” The principle of wa influences the work group, the basic building block of Japanese work and management. The Japanese strongly identify with their work groups, where the emphasis is on cooperation, participative management, consensus problem solving, and decision making based on a patient, long-term perspective.
Open expression of conflict is discouraged, and it is of utmost importance to avoid embarrassment or shame—to lose face—as a result of not fulfilling one’s obligations. These elements of work culture generally result in a devotion to work, a collective responsibility for decisions and actions, and a high degree of employee productivity. It is this culture of collectivism and shared responsibility that underlies the Japanese ringi system of decision making.
The wa principle is one aspect of the value the Japanese attribute to amae, meaning “indulgent love,” a concept probably originating in the Shinto religion, which focuses on spiritual and physical harmony. Amae results in shinyo, which refers to the mutual confidence, faith, and honor required for successful business relationships.
In the ringi system, the process works from the bottom up. The Japanese process is dispersed throughout the organisation, relying on group consensus. The ringi process is one of gaining approval on a proposal by circulating documents to those concerned throughout the company. It usually comprises four steps: proposal, circulation, approval, and record. However, Americans use a centralised system, where major decisions are made by upper-level managers in a top-down approach typical of individualistic societies.
Generally the person who originates the written proposal, which is called a ringi-sho, has already worked for some time to gain informal consensus and support for the proposal within the section and then from the department head.
The next step in the decision making process is to attain a general consensus in the company from those who would be involved in implementation. To this end, department meetings are held, and, if necessary, expert opinion is sought. If more information is needed, the proposal goes back to the originator, who finds and adds the required data. In this way, much time and effort—and the input of many people—go into the proposal before it becomes formal. Till now, the process has been an informal one to gain consensus; it is called the nemawashi process. Then, a more formal authorisation procedure starts which is called the ringi process.
The ringi-sho is passed up through successive layers of management for approval—the approval made official by seals. In the end, many such seals of approval are gathered, thereby ensuring collective agreement and responsibility and giving the proposal a greater chance of final approval by the president.