Outsourcing and Offshoring in Japan

Karen Zheung

Ms. Parham

AP Language and Composition

March 1, 2013

Outsourcing and Offshoring in Japan

Outsourcing and offshoring is typically a term used in the American business.  On that note, it’s rare for us to think that eastern Asian countries like Japan also have their own business of outsourcing and offshoring. Although these business techniques were look down on at first, it is becoming widely accepted as a necessity to boost the Japanese economy.

Outsourcing and offshoring isn’t as popular in Japan as it is in America. In the past little companies had ever considered using these techniques due to cultural complications such as language. However in 1997 that began to change when Japanese companies realized the need to “demonstrate their ability to change.” (Strom 2). At that time, Daiwa Bank and IBM Japan were considered to be one of the first companies that officially outsourced. Initially there was resistance from the bank and society, but not for financial reasons—for cultural ones involving the “treatment of people.” (Strom 1). However when Daiwa’s business “more than tripled IBM Japan’s outsourcing revenue” it became clear that was the way to go if they planned competing with its rivals. (Strom 1).

In order for outsourcing to become as successful as it is in the States, Japan had to address some cultural issues first. In Japan, there is a lifetime employment policy where college graduates are guaranteed a job of life should they work right away.  With the introduction of outsourcing the younger generation will no longer have this reassurance. However many Japanese companies are still reluctant to use foreign workers. Therefore companies send natives workers overseas, paying them less they then they originally would in Japan. Outsourcing companies, like Transcosmo and Masterpiece have set up call centers in various cities in southern Asian staffed by Japanese employees. For many employers this is vital on the basis that foreigner workers will not have a thorough “understanding of the manners and politesse that Japanese customers often demand.” (Tanikawa 1). While this certainly deviates from Japan’s original way of running it, there are also some who find this change very pleasant. Employees like Natori report a “new sense of liberty” working overseas despite the low salary. (Tanikawa 1). Working in a foreign place may be a positive change for some. It gives you the opportunity to work in places you normally wouldn’t visit and more importantly, it sets you “free from some of the social and workplace pressures” experienced in Japan. (Tanikawa 1).  In fact Transcosmer executives pointed out that their Thailand-based employees show more efficiency than their counterparts in Japan.  Employees “concentrate on work better because of the clear separation” between work and private life, but also the lack of job security creates more awareness of their performance. (Tanikawa 1).

            Japan’s aging population also plays a key role towards their acceptance of outsourcing. As their population continues to age, fewer computer engineers are being produced. As it stands “more than three million Japanese are expected to retire from the service sector” by 2020. (Bellman 1). In order to meet demands it’s inevitable that the Japanese outsource. Outsourcing was certainly seen as a taboo in the beginning, but in order for Japan to compete against its peers these techniques will be instrumental even if it means changing the cultural boundaries.

Works Cited

Bellman, Eric. "India's Outsourcing Firms Lure More Japan Business." The Wall Street

            Journal. Dow Jones & Company, 17 Aug. 2009. Web. 28 Feb. 2013.

Strom, Stephanie. "THE BUSINESS WORLD; In Japan: Outsourcing Without A Capital

            'O'"The New York Times. The New York Times, 16 July 2000. Web. 28 Feb. 2013.

Tanikawa, Miki. "Many in Japan Are Outsourcing Themselves." The New York Times-

Global Business with Reuters. The New York Times, 21 July 2012. Web. 28 Feb. 2013.