International Business Profile of South Korean and Japan - Essay Example

International Business Profiles Introduction In working with the global commercial environment, it is important to note that knowledge on the impact of cultural differences is important and is the key for business success. It is therefore important to improve cultural awareness as it enables many companies in building international competencies as well as enabling individuals in becoming globally sensitive. Countries that are cultural focused find it easy in containing their world business culture as what is important is the knowledge of the underlying issues. Schoenbaum (26-27) puts it that every country has a different business profile with information ranging on the topics of immediate commercial relevance. The above study analyses the international business profile for Japan, South Korea and Singapore. It also shows their FDI profile and how the countries are able to deal with the international demand for business. Japan international business profile Japan is located in the eastern Asia which is at the Island between North Pacific Ocean and the East Sea or the Sea of Japan. The capital city is Tokyo and the total population is about 127 million as at 2004. The Japan ethnic community is made up of 99 percent of Japanese and the 1 percent includes others such as Korean, Chinese, Filipino, Brazilian and other minorities Chew (2008). The religions include that of Shinto and Buddhist which is about 85 percent. The Japan language is said to have originated from the Altaic languages such as Turkish and it is recognised to be close to the Korean language. The economy of Japan is ranked as the second after USA. Japan is the largest manufacture of machine tools and the leading automobile manufacture. It is also popular in steelmaking and this manufacturing and service industry has contributed to the growth of Japan’s GDP. Japan is therefore ranked as the major fishing nations in the world though this account for a small percentage of the GDP. The three major partners of Japan include China, South Korea and United States. Japan’s major exports include transport equipment, motor vehicles, machinery, textiles, foodstuffs, metals and many others. The major imports include fuels, clothing and accessories, raw materials, mineral fuels and semiconductors. According to Hoe (2010) Japan’s culture include saving face which is the business culture. They also believe that turning a customer’s request amounts to embarrassment. Japan’s business profile involves harmony which is the guiding philosophy for their business settings. The education system also insists on interdependence and personal dignity. The Japanese understand it is difficult for foreigners to work there as they do not expect foreigners to be conversant with the culture and language. They therefore do business basing on personal relationships. Communication is through greetings or seasonal cards and international traders should ensure they respond as this holds a person to be of high esteem. Japan external trade organisation provides efficient information including various facilities and centres, domestic as well as international services for investments. This includes economic, market reports and surveys (Chew 2008). South Korean international business profile South Korea is located in the Eastern Asia which is the border of East Sea and Yellow Sea. The capital city is Seoul and the population is about 48 million as at 2004 census. The ethnicity is made up of homogeneous people. Their religion is comprised of 26 percent of Christians, 27 percent of Buddhist, 46 percent of people with no affiliation and others. The Koreans speak one language and share a distinct physical characteristic which makes them different from other people in Asia such as Chinese and Japanese. South Korea is more influenced by Confucian values that permeate all working life aspects which include management systems or interpersonal relations (Dennis 2003). According to Denoon & Hudson (22-23) the Confucian ethics majorly emphasise on the value of collective harmony among the working groups, the respect for authority and the importance of embracing family, friendship and clan. As is the case with Japan and China, the relationships developed are important in influencing effective business profile. This is because they believe in making a friend first and then making a customer. This involves being honourable, respectable and trustworthy. South Korea experienced an economic downturn during the Asian currency crisis where many traditional beliefs and approaches were challenged internationally and externally. South Korea business culture is at crossroads with the need to get accommodation between traditional values and management practice (Mancall 156-157). Singapore international business profile Singapore is heavily influenced by the Western culture in its business profiles. The Western business influenced is contributed by the legacy of the colonial past as well as the status of being the number one destination for many U.S and European businesses. Many of these businesses locate their Asian Head Offices in Singapore and therefore the Western attitudes and processes are more adopted. Despite this, Singapore remains an Asian country located in the Southern Asia between Malaysia and Indonesia. The capital city is Singapore and the total population is about 4 million. The ethnic community is made up of 77 percent of Chinese, 15 percent Malay, 8 percent Indian and others. The religions commonly used in the country include Muslim, Buddhist and Christian. There are four national languages used which include English, Tamil, Malay and Mandarin (Denoon & Hudson 22-23). The society and culture includes the concept of harmony, mutual security and respect. Business is more formal in Singapore and much communication is non-verbal. Many of the inherent beliefs there include Confucian and Chinese. The Singapore government is known for pragmatic governing which is important in maintenance and promotion of Asian virtues. The Western liberalisation is therefore expensive and should be restricted in order to create a good business environment. Singapore also uses autocratic style which has brought about significant economic benefits and social benefits as well as reduced crime rates and lack of poverty. This constant balancing from the Western-style business practices while at the same time holding to traditional Asian values has enabled the country to effectively manage its international business dealings effectively and in a harmonious manner. As with many Asian countries, Organisational structures are hierarchical as many businesses originated from family-run businesses. Business decisions are therefore made at the top management and the lower levels have to be involved in the decision making process (Hammer et al. 47-58). FDI in Japan, Singapore and South Korean Foreign direct investment include the net inflows of investments for acquiring management interest of an enterprise that operates in an economy for example the Japan’s economy other than that of another investor. This also involves management, joint venture and transfer of technology and expertise. Hoe (2010) shows FDI in Japan has significantly increased in the last decade to about $ 185 billion as at 2010. Japan has been ranked as the largest recipient of FDI globally though it fell in 2008-2009 as a result of the macroeconomic factors. In 2006, the Japanese government planned on accelerating effort for achieving its goals for doubling the total FDI stock to about 5 percent of GDP in the year 2010 (Hammer et al. 47-50). Japan External Trade Organisation (JETRO) was the major principal body that helped in the realisation of this goal. This was as a result of improving the cumulative FDI from the fraction of most of the developed countries. Bond (2006) describes that JETRO provided companies with direct link to business in Japan as this increased the number of foreign investors. It also made it easy for foreign firms to acquire timely and effective information on specific regions, markets as well as incentive programs of doing business in Japan. In 2010, FDI was down by 83 percent while in U.S it increased by 43 percent. In Singapore, there was 123 percent increase. U.S therefore becomes the largest recipient of FDI as inflows are estimated to be $186.1 billion as at 2010. China was second and Japan was ranked below Thailand which was at 14th place. Global FDI inflow remained stagnant as compared to previous years (Hoe 2010). According to Bond (2006) Singapore is ranked as the second FDI source to India as it soared by about $1 billion. In the years 2006-2007, Singapore FDI was $57 million below that of UK and US. One of the reasons linked to the increase is the inflow from two sovereign wealth funds which are GIC and Temaselk. Totman (442) the cumulative FDI since 2001-2008 as at $6.07 billion and this was second to Mauritius which was $31 billion. Today, it is at 8.3 percent of the cumulative inflows. FDI in South Korea fell by 13.2 percent in 2010 as a result of a stronger win and slow recovery led by the global investment market. The amount of FDI was $2.93 billion as compare to the previous year’s which was $3.38 billion. It is attributed there will be a drop of the strong South Korean currency as the total FDI is also expected to shrink as a result of global economic recovery. South Korean is therefore working on attracting more investors from emerging new markets such as China as its FDI has increased significantly (Hoe 2010). The below table shows Japan’s FDI stock balance The above diagram shows South Korean GDP and FDI since 2001-2006 The above diagram shows Singapore GDP and FDI since 2001-2006 Works cited Bond, Sam. Singapore enveloped by Sumatran smog. Edie newsroom, 2006. Chew, Ernest. A History of Singapore. Oxford University Press, 2008. Dennis, Hart. From Tradition to Consumption: Constructing a Capitalist Culture in South Korea. Seoul, 2003. Denoon, Donald. & Hudson, Mark. Multicultural Japan: Palaeolithic to postmodern. Cambridge University Press, 2004: 22–23. Hammer, F. et al. Dual origins of the Japanese: Common ground for hunter-gatherer and farmer Y chromosomes. Journal of Human Genetics 51, (2006): 47–58. Hoe, Yeen. Singaporeans of mixed race allowed to 'double barrel' race in IC. Channel News Asia. Singapore, 2010. Mancall, C. Travel narratives from the age of discovery: an anthology. Oxford University Press, 2006: 156–157. Multilateral Investment Guarantee Agency, World Bank Group, Available at http://www.fdi.net/country/sub_index.cfm?countrynum=172 Schoenbaum, J. Peace in Northeast Asia. Edward Elgar Publishing Limited. (2008): 26–29. Totman, Conrad. A History of Japan, 2nd ed.. Blackwell, (2005): 442. Read More