Gesture of respect or Excuse to Hide? - 'Kuuki wo yomu' culture in Japan

“Read the air”- the literal meaning of 'Kuuki wo yomu', a concept that permeates almost every aspect of a Japanese’s life. It means to understand the unspoken ways about how you behave in public spaces without explicit information. “Kuuki”, the air, is referred as the “subtle intersubjective atmosphere generated, constructed and constantly changing through the incessant negotiation of people involved”. This subtle and unique culture has extensive impact on interpersonal relations, Japanese corporate governance, and even the general Japanese society. This article seeks to look at how the concept manifests itself in these areas.

Japanese etiquette and the unspoken rules

The phrase 'Kuuki wo yomu' is a broad term that refers to two things. It can mean the spectrum of specific cultural etiquettes instilled in the Japanese society that are little-known by outsiders; but the phrase itself is also a custom, which is the general way of implicit, indirect, and ambiguous communication. It might sound abstract for now, but it can be easily understood by looking at a few daily examples. For instance, slurping noodles very loudly means that the noodles are tasty in Japanese culture whilst the same act would be considered as rude elsewhere in the world. Other examples include number “4” means death; blowing nose in public is rude; and tipping is insulting. All of these fall under the first meaning of the phrase, which are a compilation of social manner that constructs people’s behavior. It is not difficult to soon realise how difficult it is to properly practice the customs in daily life, especially for foreigners, as it requires a high level of cultural understanding. At the same time, because of importance of all these etiquettes, books are published to teach foreigners the nuances of these Japanese etiquette. Posters are displayed in Tokyo to remind people how to behave in the public arena.

Whilst some of the etiquettes, although difficult for outsiders to understand, can be explicitly written on a book, the essence of the concept is that there are rules that shall not be spoken of. The need to “read the air” comes from the fact that people tend to use body language and facial expressions to show that they are uninterested, unconvinced or angry to avoid explicitly challenging someone. If the request cannot be agreed to, they will say, 'it's inconvenient' or 'it's under consideration’, but they would never reject directly. A customer may tell a salesperson that they will consider a purchase in the next budget cycle instead of directly saying "no." By “reading the air”, salesperson would know that the customer is turning down the offer to purchase.

“Saving faces” and Hierarchy

The idea of delivering negative feedback in roundabout ways derives from the concept that “saving faces” (mentsu), that is one's public image that a person fulfils his or her social role as expected by others. A study stated that 78% of the interviewees consider mentsu as important for them. The emphasis on “saving faces” manifests through people not wanting to themselves lose face, or create a situation in which the listener would lose face. For example, homeless in Japan, despite living desperately poor, would sustain an “astonishingly disciplined life". Face is a mark of personal dignity. Therefore, people in Japan do not openly criticise, insult, or put anyone on-the-spot in order to help retain others’ composure and avoid embarrassment.

The reluctant to criticise others manifests more so in a society that stresses on hierarchy like Japan. Nihon-teki-keiei, the Japanese-style management, establishes that new recruits shall only start at the bottom and work their way up through their firm-based internal labour market. The distinct seniority-based wage structure emphasises the respect that age gives employees, rather than their abilities at work. Usage of Honorifics, for example the suffix use as well as the different names used for those younger or older than the speaker (kōhai/senpai), evinces the crucial practice of conveying esteem and respect for the more senior.

Avoid putting one in embarrassment and a respect for seniority are not in themselves deleterious. Comparing to Western values, one may criticise the Japanese way for lacking respect for individuals’ thoughts and being less transparent and efficient. However, it shall not be forgotten that these practices derive from the emphasis on politeness and thoughtfulness in Japanese culture as well as the Asian practice of collectiveness, which are historically essential values of their own.

Ramification on the business sphere

Nonetheless, beyond the personal sphere, manifestation of these cultures in the business sphere shows extensive ramifications on both individual corporations and the overall Japanese economic development. Reluctant to criticise hinders many to put their constructive feedbacks across. Employees prevent humiliating managers by not reporting problems. An example would be the Mitsubishi Friday Clubs, where chairmen of all keiretsu members of Mitsubishi meet to discuss their operations and strategies. Nobody publicly criticises or embarrasses the underperforming group members so that problems are left unspoken and accumulated.

As the very nature of the unspoken rule is to tiptoe around the issue at hand rather than address it head on in order to avoid the prospect of someone or a group 'losing face', problems in many Japanese corporations have accumulated to the extent that causes dire consequences. A long list of corporate scandals can still be easily found by a simple google search. This includes the 2015 Toshiba scandal where the company overstated profits by £780m over a seven-year period that took in three Chief Executives. An investigation into the affair concluded that while bosses did not tell staff to falsify numbers, they were put under immense pressure in the expectation that corporate culture would result in this happening. In 2016, Mitsubishi admitted faking data to show its cars were more fuel efficient than they really were. Takata only succumbed to long-running quality problems affecting millions of its airbags in 2017 after a decade of allegations. Earlier this year, Kobe Steel, one of the country’s largest corporations, admitted falsifying data about quality of some of its products over a period of three years. Whilst some of these misdeeds are unveiled, it is generally believed that the periods of falsification are far longer than what corporations have claimed and that there are many more fraudulent corporations under cover.

One of the most world-shocking scandals was the Olympus fraud case. The first non-Japanese CEO Michael Woodford discovered falsifying financial statements which revealed 13 years of loses and disclosed a $1.7 billion accounting fraud in 2007. He later revealed that at least two colleagues knew about it but were instructed by the then-chairman, Kikukawa, not to tell Woodford. As Woodford continued to press on the issue and eventually contacted an independent accounting firm to verify, he was quickly removed from being the CEO. The then-chairman soon stated in a staff email that Woodford had "ignored established decision-making processes and created many wedges among the managers and within the organisation ... vastly different to what we had expected of him, which was to accelerate decision-making and speed up the management." This clearly shows an established hierarchical structure that is undefeatable.

Effective Government response?

As the case unveiled, an investigation into the causes of the fraud concluded that the Olympus whistle-blower system was defective as hotline was connected only to the compliance department which was controlled by a member of senior management who himself was complicit in the fraud and who prevented efforts to establish a hotline link external to Olympus. In 2015, amendment to the Companies Act was made and the Corporate Governance Code was introduced to bolster the corporate governance and the integrity of the whistle-blower law regime. The key guideline in the nonbinding Code is that companies should set up a whistle-blower point of contact that is independent of management and consists of outside directors and outside statutory auditors. A 'comply or explain' approach was adopted where listed companies must publicly disclose the reasons for any non-compliance with the Code's principles.

Whilst some argue that this shows the government’s attempt to improve corporate governance, compliableness of corporations comes into question. The statutory Companies Act does not require the relevant auditors to be outside auditors while it is not that difficult for companies to find reasons to explain their non-disclosure under the Code.

Adding on the scepticism is the Government’s attitude towards improving transparency. Some commentators have argued that the catastrophic Fukushima nuclear disaster was indeed avoidable. The true cause of the atrocity was the "pervading culture of complacency over safety" which led Tokyo Electric Power’s failure to implement the needed safety improvements. Overly optimistic and inaccurate data was also used to design the plant, causing inaccurate precautions which failed to prevent the disaster. Furthermore, the "collective mind-set of Japanese bureaucracy" surpassed the interests of the wider population, in that TEPCO was unwilling to accept that their position was compromising the safety of the populous around them in order for their company to “save face”. As the Fukushima nuclear accident independent investigation commission's chairman, Kiyoshi Kurokawa, concluded, "this was a disaster 'Made in Japan.' Its fundamental causes are to be found in the ingrained conventions of Japanese culture: our reflexive obedience; our reluctance to question authority; our devolution to 'sticking with the programme'; our groupism; and our insularity." One may think that the Japanese government would learn from the such catastrophic mistake. However, the Country chose to take an extra step towards the other direction. A State Secrecy Law was enacted in 2013 which allows the government to lock away government documents for 60 years. Civil servants leaking information can expect ten years of incarceration. Journalists and other civilians helping them would get five years. Reports on Fukushima incident has been forbidden. Instead of addressing the underlying problems, the Japanese government chose to, once again, cover up and reiterate its impregnable authority.

In fact, no one was jailed for the $1.7 billion Olympus fraud case nor the negligence causing the Fukushima disaster. Instead, the government has been putting failing corporations on “life support” so that no embarrassment would be brought to employees and, more importantly, the nation. That is to say, it is quite difficult to expect any progressive changes towards tackling the problematic conventional culture and better transparency given the conservative position the government is taking.

Japanese economic development

Beyond individual corporations, the hierarchical culture and accentuation on “saving faces” affects the Japanese economic development as a whole. Corporate hierarchy means that it usually takes many years for one to gain higher positions in a company. An excessive stress is put upon the role of one within the hierarchical ladder. A barrier is built for innovative young people to get their views across as they need to respect the authority of their elders and thus not encroach upon their 'territory' in the workplace. Youngsters are also reluctant to challenge the status quo. This is seen to stifle the production of new ideas and potential productive collaboration gained through the exchange of old and new ideas from older and younger generations. It may also inhibit the aim of improving overall innovative openness in Japan as people are reluctant to speak out. Such an impact is seen to be affecting the entrepreneurial ecosystem in Japan. The Country has the second lowest rate of early-stage entrepreneurial activity amongst all economies surveyed by the Global Entrepreneur Monitor (GEM) in 2014. The average age of Japanese entrepreneur is over 45, which is far older than that in most other member countries of GEM. This partly attributes to a culture that stresses on conformity and is highly critical of failure. Only a small percentage of Japanese adults perceive that there are opportunities to start a business and that they are capable of doing so.

Despite many claiming that Japan has progressed under globalisation which pushes the socio-economic norm towards transparency since its “Big Bang” era, the deregulation of the Japanese financial markets in 1996, it is interesting to look at how open Japan is seen in an International transactional market. Many think that the strenuous cultural practices that expected of one to adopt in order to act appropriately in Japan makes it exceptionally difficult for foreign businesses to access the Japanese market. Foreign businesses are likely to complete a transaction if insufficient respect is shown. Therefore, the “kuuki wo yomu” culture might have unmeasurable impact on the Japanese economics.

Conclusion

The 'Kuuki wo yomu' culture is an ingrained concept in Japan. From social relations to corporate governance and government legislations, it manifests to be guiding the acts of many people. The hierarchical social structure and the concept of mentsu are arguably the underlying reasons of the low innovative entrepreneurship and the myriad of corporate scandals. To attain a desirable economic reputation and innovative advancement, it would be vital for the Japanese government to face the underlying problems and pay legitimate costs to tackle the issues.