What roles do Japanese start-up companies in Germany have?

There are roughly 2000 active Japanese companies in Germany, which mainly represent their HQ functions in the European market, and whose presence has gained more significance in the local market over the years. Alongside old Japanese companies, the number of small Japanese companies in Germany is increasing. Many start-up subsidiaries have also opened in recent years and their function differs from the well-established companies.

Each Japanese company has a different function and organizational structure depending on the size, industry, and especially the age of the company. As shown below, subsidiaries’ roles and their importance are inherently connected with the degree of their development. In general, the younger the subsidiary is, the more it relies on the HQ’s decisions.

Reference: Strategic Development of the Multinational Subsidiary through Subsidiary Initiative-taking, Delany 2000

Newly-established Japanese subsidiaries oftentimes have immature organizational structures in the local market, low sales, a small number of employees, and poor location. Local production or modification is, in many cases, still unavailable. Because of those challenges, employees are able to use their creativity and cultivate an entrepreneurial mindset in order to develop their business. Both expatriates and local employees cooperate like a family and work hard to expand the business.

Sales Marketing Production
Establishment + 0 0
Expanding ++ + 0
Strategic pivot/apex ++ ++ ++

 

Functions of Japanese start-up companies

When a Japanese company starts its operation in the German market, it is regarded as a bridgehead that doesn’t have a firm position and company structure. In the HR field, it is called “Vassal” which means it doesn’t have a high decision-making autonomy and tends to rely on the HQ’s decisions.

Reference: AUTONOMY AND PROCEDURAL JUSTICE, Taggart 1999

In this phase, the subsidiary focuses on making profits (at least being in the black) and creating a stable structure. In the beginning, the subsidiary is managed by Japanese expatriates but gradually the local autonomy is shifted to the local staff. Below are the characteristics of subsidiaries in the early phases of their establishment.

Characteristics of new subsidiaries:

  • Immature organizational structure
  • High reliance on the HQ’s decisions
  • Management relies more on human-oriented decisions than on the contract
  • Flexible job roles for the staff

Naturally, the aforementioned start-up companies can make use of the existing know-how and the capital from their parent company in Japan. However, developing a strong position in a completely new market may still prove challenging for most Japanese companies.

Job roles and requirements

When it comes to the individual roles, employees are expected to have business development skills (The Role of the Business Development Position in Japanese Companies for German/English Native Speaker) with which they can establish new business models in the local market, as shown below:

Main job roles of the employees

  • Market research of the German (European) market
  • Client acquisition
  • Price management
  • Management/Verification of the trade conditions between Japan and Europe
  • Structure organization

In the early stages of the subsidiary, communication with Japanese expatriates and the Japanese HQ is often required, therefore Japanese language skills are undoubtedly regarded as an advantage for the prospective candidate (they’re not obligatory to have though it depends on the company).

Moreover, a C1 to a native-level understanding of the language of the country you are committing to is also an important requirement for a Business Developer/Business Development Manager. Of course, one needs to be familiar not only with the language but also with the business practices and culture, etc. of the country.
Reference : The Role of the Business Development Position in Japanese Companies

Besides hard skills, the following soft skills (traits) would be desirable in people willing to work for Japanese start-up companies in Germany.

  • Self-reliance
  • Team-working skills
  • Creativity
  • Good communication skills

Above all, working in a foreign company definitively suits a person who can enjoy „different cultures”.

R S
Senior Consultant

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