Japan & Canada | Course Paper

Unlock access to all the studying documents.

View Full Document

JAPAN AND CANADA 1

An Examination into Doing Business in Japan and Canada

JAPAN AND CANADA 2

Table of Contents

Introduction…………………………………………………………………………………..……3

Political Environment………………………………………………………………………..……3

Legal Environment…..………………………………………………………………..…………..6

Economics…………………………………………………………………………………..……..8

Corporate Social Responsibility……………………………………………….…………………….10

Entry Strategies………………………………………………………………………….……….12

Culture………………………………………………………………………………….………..13

Cultural Dimensions…………………………………………………………………….……….16

Conclusion………………………………………………………………………………..………18

References………………………………………………………………………………………..19

Appendix…………………………………………………………………………………………22

JAPAN AND CANADA 3

An Examination into Doing Business in Japan and Canada

Introduction

Japan and Canada are two well-known, globally important countries. For decades, the

two countries have performed well economically, Canada entertaining a strong market and Japan

making great strides in innovation and technology. Each country has unique political, legal,

economical, and cultural environments that must be navigated in order to do business effectively

within their borders. Though the countries have a few similarities, Japan and Canada are

different in many ways; most notably with their cultures and cultural dimensions.

Political Environment

According to the CIA World Factbook (2016), Japan and Canada both have a

parliamentary democracy and a constitutional monarchy. This means they both have executive,

legislative, and judicial branches with elected members, as well as a monarch of heredity. Canada

and Japan may both have a parliamentary democracy and constitutional monarchy, but differ in

the relation to terms served, guidelines, and political pressures.

The Canadian executive branch consists of a prime minister, monarchy, and governor

general. The Prime Minister of Canada attains position by being the leader of the elected

majority party in the House of Commons. The Prime Minister appoints his cabinet and advises

the lineage monarchy on appointing the governor general. The governor general represents the

monarchy serving a five-year term. The Legislative branch consists of the Senate and House of

Commons. The Senate of Canada is appointed by the governor general with advice of the Prime

Minister consisting of 105 seats that can serve until the age of 75. The other legislative branch,

House of Commons, are elected members by a majority vote serving 4-year terms consisting of

338 seats. The Judicial branch consists of the Supreme Court, which also happens to be the

JAPAN AND CANADA 4

highest court. This high court system is home to the Chief of Justice and 8 other judges that are

appointed by the Prime Minister, according to CIA (2016) (p. 143). Political pressures are

important to look at in a country because they could affect the business practices’ of an

organization. If a newly elected party in legislation wants more regulations on air pollution, and

there’s an organization that releases their toxic factory fumes in the air, that organization may be

fined or possibly put out of business. According to the CIA (2016), “Political pressures in

Canada are agricultural sector, automobile industry, chemical industry, commercial banks,

communication sector, energy industry, environmentalists, public administration groups, steel

industry, trade unions” (p. 143). It is also important to keep in mind that political pressures may

change in a country as there are often newly elected party officials.

Japan’s executive branch consists of an emperor, prime minister, and deputy prime

minister. Just like Canada, the Prime Minister of Japan is the leader of the elected majority party

in the House of Representatives that then goes on to appoint their cabinet. The Emperor of Japan

is lineage also like the monarch of Canada. The legislative branch, Diet, has two branches:

House of Councilors and the House of Representatives. In correspondence to the CIA (2016), the

House of Councilors has 242 seats with 146 of those seats being elected. Japan differs from

Canada in that their House of Councilors is elected by vote and the technique used. The multi-

seat proportional representation vote is a different technique than what is used in Canada, where

majority voted party wins and controls. The other 96 seats are elected in multi-seats by

proportional representation vote, which means there are multi-member districts elected by

popular vote to ensure that all parties are being represented fairly, in accordance with Douglas

Amy (2005). In correspondence again with the CIA, The House of Councilors members serve 6-

year terms and one-half of the membership is renewed every 3 years. There are more members in

JAPAN AND CANADA 5

the House of Representatives having 475 seats, again, we see the multi-seat proportional vote.

The single-seat members are dominant with 295 members and multi-seat members of 180. The

House of Councilors members serve 4-year terms with one-half of the membership renewed

every 2 years. The judicial branch contains the Supreme Court members such as the chief justice

and 14 associate justices that are appointed by the Emperor and selected by the cabinet. “Political

pressures in Japan are trade unions and business unions,” as stated by the CIA (2016).

Looking at Canada and Japan their government structure is very similar but they differ in

relation to terms, representation, and political pressures. The Monarch and Emperor of these

countries are both positions of lineage and the prime ministers are appointed by the elected

majority vote of the House of Common and Representatives. Japan seems to renew membership

to the legislative branches and establish set term years on memberships. Compared to Canada

where they only set term years for the House of Commons and an age limit for the Senate. Japan

also has almost double the amount of members in their legislative branch compared to Canadian

legislative members. As reported by the CIA (2016), there are more government officials in

Japan than in Canada, but perhaps it is also due to the 47 prefectures that are divided into 8

regions compared to the 10 provinces and 3 territories of Canada. Japan also has the multi-seat

representation vote to represent voters in legislation. Japan seems to have more checks and

balances in place and wants to ensure there is a fair representation for their country in the

government as compared to Canada. Canada also has a longer list of political pressures that can

affect business in their country while the Japanese political pressures emphasis is on unions for

the moment. Political pressures are factors to consider when conducting business in these

countries.

JAPAN AND CANADA 6

Legal Environment

According to Daniel Poon (2015), in Canada, they have a larger focus on protecting the

environment as well as pushing innovation and technology in their business practices. They also

support a liberal trade regime that poses no foreign exchange restrictions or import licenses

except on certain specified items as dictated by their Export and Import Permits Act (which

include dairy and food products) and Canadian Customs Tariff. Most goods can easily enter the

Canadian markets, however. The International Law and Treaties (2015) suggests that Japan

employs a peaceful settlement approach to international disputes whenever the need arises. Japan

also works towards the progressive development and codification of international law. Japan

actively participates in legal discourse, which is the language in which their laws are written and

it departs from the common mode of speech, to maintain their laws. In addition to this, Japan

also participates with regional legal consultative organizations.

According to M. Evan Corcoran (1991) from the Georgetown University Law Center,

under the Commercial Code, Japanese companies have certain specifications they are required to

meet. These specifications include stock companies being required to have three or more

appointed directors at meetings regarding that company, as well as having many members on the

boards, which is similar to the corporate positions in American companies. Shareholder rights are

also weaker in Japan than most other countries solely because they handle corporate governance

differently. There are also barriers between Japanese and non-Japanese companies which reduce

trade and merger activities, but an initiative known as the Structural Impediments Initiative (SII)

has worked to decrease these barriers and promote more open trade outside of Japan.

Corcoran (1991) also suggests that there is a moral component to Japan’s business culture.

Larger companies tend to guarantee lifetime positions to their employees and directors consider

JAPAN AND CANADA 7

the consequences of their choices based on the lives of their employees. Directors are typically

lifetime employees as well. Today, doing business in Japan is easier than it was in years past, but

there are still many steps that must be covered before a business can set up legally in the country.

According to Daniel Poon (2015), The Borden Ladner Gervais LLC law firm of Canada

wrote a detailed pamphlet on doing business in Canada. It detailed that the Canadian legal

system mostly originates from the English common law and the French civil law, depending on

the territory (like British Columbia and Quebec). Provincial law has a greater impact on business

than federal law because the provincial laws dictate property and civil rights whereas federal

jurisdiction focuses more on specific kinds of business acts such as banking and intellectual

property. Some criminal behaviors and matters of national importance also fall under federal law.

The legal system in Canada can become “muddy” simply because of the amount of opt-outs