Monday, 3 December: Japanese Risk, Quality and Trust Traits

Mr Vaughan Turner, Managing Director, Terasaki Electric Europe

The Adam Smith Business School hosted the second lecture of the Europe-Japan Dialogue Lecture Series on 3rd December 2012 with Mr Vaughan Turner, Managing Director of Terasaki Electric Europe.

Terasaki is a world class specialist in innovative circuit protection, control and system products for the electrical energy distribution. Dating back to the 1970s, Terasaki Electric’s operation in Clydebank, Scotland is one of the oldest Japanese companies in the UK and the oldest in Scotland. Terasaki Electric Europe is unique among UK-based Japanese companies, as it doesn’t have Japanese employees among its senior management.

Presentation Summary

• Based on his experience of working inside a Japanese company for many years, visiting Japan many times, and interacting with other Japanese businesses in Japan and Europe, Vaughan Turner, sees the following Japanese traits: -
• Honour (Protection of your honour is important to survive in Japanese organisation or society)
• Respect (educated from childhood to respect others, especially elder people)
• Discipline (No looting at the time of the earthquake and the tsunami in March 2011)
• Attention to detail (neat packaging; resulting in high quality)
• Trust (After the earthquake and the tsunami of March 2011, the European side saw opportunities to sell Terasaki’s products, while their Japanese colleagues helped other companies, including their competitors, recover)
• Acceptance (Once a decision is made or an instruction is given, no one would challenge it)
• Quality (In the UK quality suffices if it fits for purpose, while in Japan perfection of quality is pursued)

These traits would explain first of all why Japan is the safest country in the world. On the other hand, the traits, together with Japan’s institutional arrangements such as one company for life and age-based salary and promotion, would explain why Japanese organisations often exhibit such weakness as being risk-averse, slow decision-making, lack of flexible thinking, lack of negotiation skills, etc.  In his view, deep in Japanese society lies ‘blame culture’ or culture of fear.  If one makes mistakes, one would be blamed for it by others, and one’s honour would be damaged, ending one’s career. Fear of making mistakes would thus make risk-averse attitudes, acceptance, and the collective, as opposed to individual, decision-making the safest course of action in Japan.

These cultural traits would not change overnight and here lies in his view, opportunities for European businesses to work with Japanese organisations. European businesses organisations would help Japanese organisations in the following areas: -

• Supporting business development
• Marketing and selling Japanese products in difficult markets, including European markets
• Assisting in business negotiations
• Helping develop a business strategy

Terasaki Electric Europe now covers not only Europe, but also the Middle East, North Africa and Latin America, and they are thanked by their colleagues in Japan for undertaking these global operations.