With the move, which took effect at the beginning of last month, Mikitani turned his e-commerce company — an Amazon competitor — into a test case for corporate Japan’s survival strategy.
As Japan’s population declines, all but guaranteeing ever-decreasing domestic business, companies here are grappling with how they should interact with the world and whether they can do it successfully.
The country has both a dread of English and an understandable attachment to its own ornate business customs. Those idiosyncrasies made Japan a bewildering but envied powerhouse during its economic boom. They now make Japan a poor match, experts say, for global business.
Mikitani took a step few other companies here have dared because, he said, he thought it would help his company expand and thrive. He also wanted to prove a point — that the Japanese, counter to the stereotype, could embrace the risks and embarrassment that come with learning a foreign language.
At the time of the 2010 announcement, only about 10 percent of Rakuten’s 6,000 Japanese employees could function in English, according to a case study by the Harvard Business School. Rakuten operated in just two foreign countries — it has since expanded into 10 more — and most of its business came from Japan. Critics argued that Rakuten’s employees, forced to hold meetings and write memos in English, would simply become less articulate, less efficient and far less happy.
At times, the two-year transition from Japanese to English — dubbed by the company as “Englishization” — has been as awkward as the term itself. Workers were told they would face demotions if they didn’t reach target test scores, and a handful of employees quit, Mikitani said. Other workers, quoted without the use of their names in the 2011 Harvard case study, saw it as an “exercise in perpetual humiliation” or as a “layoff tool.”
Rakuten’s emphasis on English has “sparked a huge debate among companies that are trying to globalize,” Accenture’s Japan-based executive Chikatomo Hodo said in a December 2011 edition of the Nikkei Business magazine. “Many say, ‘We want to do it, too, but it would be detrimental to the company’s organization and management’ ” because English-averse senior management would bristle, Hodo said.
When Mikitani announced his plan, Honda’s chief executive, Takanobu Ito, said it was “stupid” for a company to use primarily English when its workforce was mostly Japanese.
But at least one other major Japanese company, Fast Retailing, which operates the Uniqlo clothing chain, is following Rakuten’s path, though not as drastically. It has an English education program for employees, and in March, it began to use English for meetings and e-mails with non-Japanese workers, a company spokesman said.