Public Relations: Comment - Foreign companies must earn trust to be invited to the 'club'

When I first arrived in Japan some 25 years ago, a senior Japanese gentleman took me aside and told me that if I wanted to live in Japan as a foreigner I should always remember that in Japan foreigners will always be "allowed to attend the meetings but will never be allowed to be a member of the club". Twenty-five years have passed since that date and Japan has become a significantly more open and global marketplace. But I believe those words still have fundamental importance in communications strategy for any global company operating here. Although a company may have been in Japan for decades and be making a significant contribution to the lives of consumers, employment and the economy, it is still regarded as a visitor to the meeting. It has to make a greater effort than local players to both monitor the changing perceptions of the 'club' and to communicate effectively with the members.

by | 11/19/2004

The recent scandal that resulted in the closure of Citicorp's private banking business and considerable negative press coverage is a good lesson that points out the need for such multinational groups operating in Japan to have an effective corporate communications and public affairs function at the group level.

The trouble for a foreign player in the Japanese market when a scandal breaks in one of its component companies is that it is inevitably the group, or head office to which the media look to for responsibility. This is because of the common perception that foreign players operate entirely under the control of their head office. I believe Citigroup failed to communicate effectively as 'Citigroup in Japan', thus creating a trust gap between the group and key audiences that erupted into excessive criticism and negative media coverage when the scandal occurred.

At the time of the scandal, comments were made to the effect that Citigroup had thought that its size and political connections in the US would allow it to get away with infringing Japanese regulations. The perception that a foreign multinational group may try to bring political pressure to bear remains strong among the media and other key audiences. Where the perception has changed is there is a strong 'independent' streak among the bureaucracy and regulators in which any 'good word' put in by a foreign government is often viewed as an infringement on home territory and backfires.

Large multinationals need to have an effective group communications function that proactively communicates the group's contribution to Japan in order to build trust and earn corporate citizenship, and have a clearly defined public affairs and government relations programme that not only builds relations with politicians, bureaucrats and regulators, but also clearly establishes that the organisation sees its future as intrinsically linked with Japan and not controlled by remote from some offshore base.