Relationship Basis Archives - understand-culture

The Same Auditor

In July 2017, the Financial Services Agency published a report on rotating audit firms. It looked at 96 of the TOPIX 100 companies that had also been in the index in 2007. Over the ten years to 2016, 91 of them, 95 percent, had kept the same audit firm. Five had changed.

Agency materials of 2022 described the same pattern: audit contracts had become fixed, and companies were not changing audit firms of their own accord.

In the first half of 2026, Tokyo Shoko Research counted 91 changes of auditor. The most common reason given, in 42 cases, was the length of the audit tenure itself.

Terms Left Unstated

On November 1, 2024, a law on fair dealings with freelancers came into force in Japan. A client must now state the fee and the payment date in writing or by email.

In a survey before the law took effect, reported by the Japan Institute for Labour Policy and Training, 44.6 percent of freelancers said that terms had at some point not been stated to them. In construction, the share was 72.7 percent. Among clients, 17.4 percent said that they had not stated terms, and 41.7 percent in construction.

Contracts as a Front

The business site Gentosha Gold Online summarizes the view that the legal scholar Kawashima Takeyoshi set out in Nihonjin no hō-ishiki (The Legal Consciousness of the Japanese). The Japanese, in this view, tend to treat laws and contracts as tatemae, a mere front, and do not always give them much weight. When trouble actually arises, they expect to solve it through talks and personal relationships.

Use First, Pay Later

Toyama’s medicine sellers leave a box of household medicines with a family. A salesperson visits every six months to a year and collects payment only for the medicines that were used. The Agency for Cultural Affairs describes this as the traditional Toyama method, sen’yō kōri , use first and profit after.

The seller keeps a kakebachō , a customer ledger. A magazine of JR West calls it detailed data for managing customers. The magazine Waraku writes that the sellers won the trust and confidence of their customers.

Long-Term, Stable Procurement

In 2024, Toyota presented its purchasing policy at an event of the Japan Auto Parts Industries Association. The aim is to buy the best goods in the world, at the lowest cost, at the right time, and chōki anteiteki ni, in a long-term and stable way. One section is titled “Mutual prosperity based on mutual trust.”

Main Bank

Japanese companies often concentrate their borrowing, their deposits and their transfers at one bank, the mein banku, main bank. A business guide describes a tacit understanding. When the borrower falls into difficulty, the main bank watches over it warmly.

The guide also notes a limit. This support may end when the trouble comes from the borrower’s own poor management.

The Vocabulary of Regular Custom

Tokuisaki (得意先): a customer who always buys from one, or a partner one trades with as a matter of course. A dictionary gives torihikisaki, trading partner, as its synonym.

Kongo tomo yoroshiku onegai itashimasu (今後ともよろしくお願いいたします): we ask for your continued favor from now on. A business magazine explains that the phrase expresses a relationship that will continue over a long span.

Sharing the Supply Chain

After the 2011 earthquake, Toyota built a database of its supply chain with Fujitsu. It shares the information in real time with its first-tier suppliers and uses it only for disaster response and prevention.

A case study published by the Cabinet Secretariat says that Toyota can obtain this information because of mutual trust built up over many years.

Trust Beyond the Contract

Japan’s Economic White Paper of 1992 described the ties between parent companies and their parts suppliers. These relationships, it said, tend to be long-term and continuous, unlike ordinary spot market trading. Out of cooperation, a relationship of trust is thought to emerge that does not rest on an explicit contract. Shareholdings and the dispatch of directors reinforce the ties.

The paper called the keiretsu system very efficient for the buyers and sellers involved. It also noted its costs, such as the burden on subcontractors.

Good-Faith Consultation Clause

A wide range of Japanese contracts contain a seijitsu kyōgi jōkō, a good-faith consultation clause. A typical version reads: “Matters not provided for in this contract, or doubts about its interpretation, shall be resolved by the parties through consultation in good faith, in accordance with the purpose of this contract.”