Foreign Direct Investment in Japan Assignment Example | Topics and Well Written Essays - 1000 words

Foreign Direct Investment in Japan - Assignment Example Traditionally, the Japanese have not encouraged foreign investment, as a matter of fact, they have been hostile towards foreigners investing in their country, especially in the manufacturing sector. Any foreign investment currently coming into Japan is in the service industry, especially hi-tech industries such as pharmaceutical and biotechnology. Japan itself has abundant technologies but is not using these technologies in an appropriate manner (Finance and Investment). The current escalation of the Yen against other global currencies has served to make worse the disparity between Japan’s increasing investment and the dearth of foreign investments into Japan. When the strong Yen is compared with exceptional cultural, it seems that foreign investment in Japan might never increase. The Japanese government is intensifying its efforts to overcome these hurdles and increase foreign direct investment in Japan. Towards this, the government has established the Invest Japan Business Support Center and formulated an all-inclusive, wide-ranging Industry Attraction Plan (Finance and Investment). Making small changes in the law and incentives by the government really help, but the real issues that discourages foreign investors is Japan’s exceptional culture and the barriers between Japanese culture and other Western Cultures which highlights the difference between both forms of capitalism. The difference is that American companies keep the interests of their shareholders as their highest priority; Japanese workers feel that Japanese companies keep the interest of the stakeholders paramount. ... Making small changes in the law and incentives by the government really help, but the real issues that discourages foreign investors is Japan’s exceptional culture and the barriers between Japanese culture and other Western Cultures which highlights the difference between both forms of capitalism. The difference is that American companies keep the interests of their shareholders as their highest priority; Japanese workers feel that Japanese companies keep the interest of the stakeholders paramount. Foreign companies that acquire Japanese companies usually disregard Japanese business culture with the contention since they control the company, business should be done according to their own established ways dominant in the West (Finance and Investment). Western businessmen should revere Japanese culture to address employee apprehensions, while explaining to them the necessity of changing their perceptions. This increases commercial worth and also increases stakeholders’ si gnificance for employees, customers and the community at large. This business model has proved successful in Japan, and the lessons learnt from these successes will encourage foreigner companies to invest in Japan. Companies that adhere to Japanese culture and show concern for their employees have a much better chance of succeeding than companies whose main motive is to generate as much return on investment by sacking employees and selling of company assets (ACCI Journal). Acquisitions that will not meet with resistance Foreign investors were strongly advised not to do business in Japan in an offensive or provoking manner. Better still, it was advised to select areas for investment that will not be