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Japans GDP as a portion of global GDP has been predicted to shrink from 12 % in
2006 to 3 % by 2050 (Goldman Sachs, as cited in Yee, 2012). Also there has been a
gradual decrease in Japans population. Both the factors have forced Japans business
people to think of innovative ways to stay and excel in their ventures in and outside
Japan. To counter these challenges and effectively exploit the global markets, Japans
largest online retailer Rakuten took an unusual step by enforcing an English-speaking
policy for all its employees. Rakuten CEO Hiroshi Mikitani created the term
Englishnization as the means of shifting the official corporate language from Japanese
to English. Mikitani believed that his vision of global expansion would be possible if
every employee in the organization speaks in English. So in a way he employed
Englishnization as a strategy to achieve his vision of global expansion. He not only
thought of changing the culture in his company but also made a deliberate effort to push
this concept for the whole country.

English is a language used in Japan normally only to communicate to outside world.

There has been no push from any quarter to make English language more popular
among the masses or in the industry. Traditionally Japanese communicate in Japanese
language in their day to day life. An abrupt change in the policy by Mikitani brought
about some mixed reactions from its employees.
Rakuten CEO Hiroshi Mikitani announced its Englishnization program in May 2010.
During the time it began to introduce English-language in internal emails, documents
and cafeteria menus, and also held internal meeting in English even when all the
participants were Japanese. From July 1, the Englishnization became mandatory for all
company meetings, documents and other communications. That was a big change for
the employees. Many Japanese companies place importance on the ability to
communicate in English, but they rarely force their Japanese employees to use English
when theyre talking to each other. Rakuten also set a minimum TOEIC (Test of English
for International Communication) score required for managers. As a result, many

employees (at managerial level) had to study hard to match the required scores,
because failure meant demotion after July 1.
Englishnization came with its own costs and benefits. The biggest advantage was
global synergy. Rakuten is a conglomerate with offices in 20 different countries. If every
office did business in their native language it would have been difficult for Rakuten to
function as a whole. Englishnization enabled integration of knowledge and personnel.
Eventually it would lead to more effective communication across conglomerate and
would be an enabler for global expansion. It would give Rakuten competitive advantage
and make it easier to do business. It woud facilitate direct communication which would
in turn help integrate Rakutens business across nations. It would enable better
information sharing between business units which in turn would help them better
compete in the global market. Englishnization offered a means to dismantle cultural
and linguistic barriers. It opened up employees vision and broadened their horizons. It
also made Rakuten more attractive to international talent. After the launch of
Englishnization there had been a marked increase in the number of international
employees at Rakutens Japanese headquarters. The costs of Englishnization include
increased investment cost, increased pressure at work, risk of miscommunication,
reduced employee morale and fear of demotion amongst employees, feeling of
demonization and inferiority complex and high turnover. It caused a decrease in
productivity. Since the employees had to switch from Japanese to English for all the day
to day tasks at work, it took them a lot longer to do their jobs. Sometimes they would do
all their work in Japanese and then translate to English. This caused inefficiencies. Also,
getting good scores in the tests did not necessarily make the employees better at

communication. Englishnization also resulted in many employees opting for new jobs
because they did not want to learn English. There is also the question of relevance. Not
all employees were in a role which required them to communicate with global customers
or work with fellow employees in other countries. So one might wonder if it was really
necessary to have them go through the process of Englishnization.
It is clear from reading about Mikitani that he is an ambitious individual. This ambition
has helped grow Rakuten into Japans largest online retailer. On the surface, it seems
as though globalization is a way for Mikitani to continue his conglomerates incredible
growth in a way that Japan could not sustain. However, as the case goes on it is clear
that Mikitani has a deeper motivation. In the section For the Love of Country, neely
describes how Mikitani grew up well aware of the world beyond Japan (pg. 3). Mikitani
lived 2 years as a child in Connecticut which exposed him to the English language and
American culture. His parents also hosted many foreign luminaries. Neely notes that
this international exposure brought Mikitani closer to, and further from, mainstream
Japan (pg. 3). It is through this experience that Mikitani can saw the big picture of the
global economy more so than the general Japanese culture.
After reading the entire case, it appears Mikitanis main motivation is to overcome the
conservative Japanese custom and system. He believes that the conservative system
and culture act as a barrier between Japan and the outside world. Mikitani wants staff
to realize that English can break down barriers and lead to cross-border
communication (Neely, pg. 4). Mikitanis aim is to change Japan and change society
stating that he feels that it is his responsibility" (Neely, pg. 3-4). He is fearful that if
Japanese global companies do not get away from being product driven then they will

not last. Mikitani believes Englishization is critical - not just important, but critical
(Neely, pg 4).
A year after launching the Englishnization program, Rakuten conducted a survey
across all it business units worldwide. The purpose of the survey was to evaluate how
the employees are responding to Englishnization and compare the feedback between
native Japanese speakers, foreign nationals and native English speakers. The survey
showed that as the Englishnization program got underway personal stress increased for
Japanese speaking employees. A majority of these employees did not feel confident
about successfully fulfilling their current duties with English and did not agree with
making English as the business language of Rakuten. They also showed fear of
demotion and were afraid that they would not retain their access and privileges which
they had prior to the move to English. A larger percentage of Japanese speaking
employees expressed negative feelings of fear, frustration, nervousness and oppression
when compared to foreign employees and native English speakers. On the positive side
a majority of Japanese speaking employees said that their managers supported
Englishnization and provided their full encouragement and support. On the contrary,
foreign nationals and native English speakers are responding to the program much
more positively. The survey shows that majority of these employees are interested in the
program and are excited and inspired by the move to English as the business language.
The survey results substantiated what once can expect in this scenario. Japanese as a
language is very different from English. Japanese is considered as a high context
communication language where the message is surrounded by some unspoken
information where as in English the content is the exact message. So this made it

difficult to think in English when you are used to thinking in Japanese all your life. There
was added threat of demotion and pressure of an aggressive timeline to gain proficiency
in English. And Japanese speaking employees had to achieve this proficiency without
compromising with their day to day responsibilities. So it was natural that they were
reluctant and apprehensive in whole heartedly embracing the program. On the other
hand Englishnization will make work easier and more fluent for native English
speakers since it will be easier to communicate and work with the employees at
Rakuten headquarters. Foreign nationals and native English speakers feel more
capable performing job duties in English. Also, the native English speakers did not have
added responsibilities because of the program. So they showed positive response in the
survey with regards to adoption of Englishnization.
As the survey showed, Mikitanis Englishnization policy at Rakuten was met with mixed
reactions. It seemed that there were 3 main factors that determined how an employee
responded to the stipulation: the employees age, the employees role in the company,
and the employees background.
Neely states in the case that there seemed to be a cut off line at age 40. Those older
than 40 were demotivated to learn English and expressed concern that the policy was a
layoff tool. Those younger than 40, although in the minority, seemed enthusiastic at
the opportunity to learn English. The cutoff may have occurred as those that are
younger feel more confident to learn new things.
Another important factor was what role the employee played in the company. Neely
gives examples of employees who work very long hours on domestic work. Those

employees expressed concern that they would have time to learn English, but also that
they would not use it in their day to day work. Those with specialized backgrounds,
such as engineers, also were not in favor of the switch, especially if they did not
communicate with others outside of Japan.
An employee's background seemed to have a large impact on how they perceived the
Englishnization policy. For example, foreign nationals (such as those from China,
France, or Korea) and native English speakers reported feeling more capable of
performing job duties in English as opposed to their native Japanese speaking
equivalents. Managers from the United States reported relief that English was chosen
as the primary language for Rakuten. Native Japanese speakers also reported feeling
more negative emotions, such as feeling afraid, frustrated, nervous and oppressed, than
foreign nationals or native English speakers. Whereas foreign nationals and native
English speakers reported feeling more excited and inspired than native Japanese
speakers. Also, native Japanese speakers were less likely to have support from their
managers in regards to learning English.
Englishnization has impacted Rakuten in several ways. From an outside perspective,
Englishnization has made Rakuten a more attractive business to most of the world.
While Rakuten is a Japanese company with mostly Japanese-speaking employees
operating at their home offices, English is the International Language of Business. By
creating an English-speaking culture within the company, Rakuten becomes more
attractive in dealing with foreign companies in Europe and North America. The major
negative, internal impact of Englishnization on Rakuten is the blowback from
employees, particularly older, senior-level ones. Older employees appear to be more

set in their ways than younger ones, who seem more enthusiastic about the English
mandate. Englishnization alienates those employees who are not enthusiastic about
the process. Mikitanis Englishnization is a great tool for leading Rakuten into global
expansion. However, Mikitanis implementation and assessment processes were not
planned out in a way for all employees to succeed in Rakutens transition. The greater
number of Rakuten employees that succeed with Englishnization, the more likely
Rakutens global expansion strategy is to succeed.
For starters, the April 1, 2012 deadline was quite an ambitious goal. For some
employees, having only approximately two years to become proficient enough in
English to be able to conduct all business operations in the language was clearly
unattainable. The current estimate for non-English speakers to learn the language is
around 360 hours. With Rakuten not subsidizing employees learning and still requiring
their work duties to come first, employees are forced to use their own funds and their
own free time to learn the language. Instead of having a blanket goal for all employees,
Mikitani could have implemented department or seniority based goals. Even if Mikitani
wanted all employees to be wholly Englishnized by the same deadline, he could have
also considered a more lenient, realistic goal for all employees to be able to meet.
Secondly, the Test of English for International Communication (TOEIC) assessment
method is not conducive with being able to properly communicate in English within a
business setting. Being able to communicate in English both verbally and in written
form cannot be properly assessed within a standardized test. Language is an art, not a
science. Its proficiency cannot be quantified in the way that finances or other business

measures can be. While the employees may be able to pass the TOEIC with proficient
scores, communicating daily in a business setting is quite another thing.
Overall, Hiroshi Mikitanis Englishnization has the potential to make Rakuten a major
player on the global market. With English becoming the International Language of
Business, it could only benefit Rakuten to have its entire company be proficient in
English. However, Mikitanis approach to Englishnization could be improved. Mikitani
needs to take into account the differing views of his employees on Englishnization and
their ability to properly assimilate into the new corporate culture.


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