INTRODUCTION
Japan has become well known in the world for its business system. Some Western businesses have tried to imitate parts of the Japanese business system. As with other countries, the business system of the Japanese model is also influenced by formal and informal rules. This essay will describe the formal and informal rules which control the Japanese business system, and briefly comment on the interrelationship between the two types of rules. In particular, it will examine the idea that formal rules follow clearly stated government laws, and so on, while informal rules come from socio-cultural practices.
FORMAL RULES
Government often plays a part in formulating rules for business. Dunning (1997) points out that "the optimal role of government in the organization of economic activity has long been a subject of intense-and sometimes passionate-controversy" (p. 32). Over a long period, the Japanese government's role in the business system has been to enact formal rules which completely determine the activities of corporations in the economic field. …
