THE PACIFIC : Patience Pays in Japanese Deals : U.S. Liaison Offers Tips on Fine Points of Protocol, Business Etiquette

Mark Majestic believes that the key to doing business with Japanese companies is patience--patience beyond the limit of most Americans with an understanding of standard, American business polity.

“The Japanese quarterly report is a quarter of a century,” said Majestic, chairman and president of Majestic International Inc., a small, Palos Verdes-based company that assists Far East companies wishing to do business in the United States.

Majestic has 12 Japanese clients seeking California business opportunities. Four are specifically looking to buy wineries, and Majestic said three of the four may well sign deals within the next six months.

Majestic International was founded in 1976 after Majestic began to learn Chinese and study Oriental cultures. And he says he realized that business deals are rarely done overnight and they are done on a formal basis.

“One of my first experiences taught me that you have to be patient,” he said. “I flew to Tokyo for a Monday morning meeting, and I knew I had to wait for them to call me. That’s the way things are done. You may not believe this, but I waited in my hotel room for two weeks before they called.”

Moreover, do not expect to develop a business relationship only through social contacts. “You may meet someone socially and see that person many times afterward on a social basis, but if you want to do business with that person, you have to be reintroduced on a business basis,” he said.

Orderly and Precise

And no deal is done without every last element of it completely understood by both sides, he said. “The Japanese beat you to death on details.” But he said getting details arranged properly helps everyone’s understanding of delicate aspects of a deal.

Sometimes, however, general decisions are based on past performance of another Japanese company. He said Japanese companies feel comfortable buying in areas where another Japanese company already has bought. Or in areas that have a prestige image.

For example, he said, “The Japanese businessman will do every type of methodical study” and yet in looking for a California winery, “they want to buy in the Napa Valley, which is not a good place to buy right now. The value isn’t there.”

But he said that to the Japanese, Napa has a ring of gold about it. “Sonoma is where all the growth is going to be in the near future, but only recently have they realized that Sonoma is valuable.” And he said few Japanese companies have an interest in places such as Mendocino or San Luis Obispo counties.

“Trying to sell them something in Mendocino is like trying to sell them the Sahara,” he said.

The image of the wine brand is most important to the Japanese, which is one reason a Majestic client is one of three companies seeking an investment in the Pat Paulsen Winery in Cloverdale, in northern Sonoma County.

A spokesman for the winery said Paulsen intends to remain affiliated with the winery, regardless of who the investor is, and Majestic said such a commitment by Paulsen is one thing the Japanese like about his operation.

Smaller Companies

Another thing is its strong business management, after a period of fiscal decline, he said.

Majestic declined to say who his clients were but added that they were generally smaller companies, not giant conglomerates that are rumored to be looking for California wine properties.

Among the names that have been mentioned as possible buyers of wine properties in Napa and Sonoma counties are Mitsubishi, Toyota, Kikkoman, Sogo Department Stores, Okanaga, and three others that already own American wine companies: Suntory (Chateau St. Jean), Sapporo (St. Clement) and Sanraku (Markham).

Majestic gave these suggestions on protocol and business etiquette to companies who anticipate a visit from Japanese business executives:

“Have your key people there to greet the visitors. The Japanese feel insulted if underlings greet them.”

“Keep precise books and records and be able to demonstrate your claim as to the value of the property.”

“This sounds obvious, but make the property look as good as possible. Paint and soap work wonders.” He said this bit of basic advice is often forgotten by some sellers.

“Have a video camera at the property and take a video of their tour, and give it to them when they leave. The Japanese love to show them to those who couldn’t make the trip.”

“If possible, speak to them in their language, or have someone there who can.” He said that although it’s not necessary to speak Japanese (because many Japanese speak English), it helps to break down communication barriers and leads to a better understanding.