Genteel Japanese art of the business dinner

Face-to-face interactions can build trust while enriching our work lives

Settai?(business entertainment, often in the form of dinners), is a curious feature of Japanese corporate culture that is at its most intense in Tokyo, where a thriving business-social scene is encouraged by high-context official communication styles that rely on inference and "reading between the lines" and a geographically condensed professional sphere that reduces travel times.

Modern settai is no stranger to headwinds, however. In the aftermath of Japan's so-called bubble economy?(which imploded in 1991), commercial bank executives were found to have hosted industry regulators from the Ministry of Finance at a restaurant featuring waitresses sporting short skirts but no panties. The revelation caused public outrage and led to multiple arrests for bribery within the ministry.

While settai with civil servants belongs to the past, Japan's business entertainment culture faces a new challenge as business practices are reassessed in the wake of the disruption caused by the COVID-19 pandemic. The outcome is a hybrid work style and reduced in-person activities, which point toward a better work-life balance for corporate executives and save companies money. But an excessive reduction in face-to-face interactions risks eliminating the social grease built into the system.

Business dinners, whether among?colleagues or with external parties, are a mechanism that lubricates the workings of the Japanese professional world. While bribery is out of the question, we should cherish and continue the tradition of business entertainment, which connects people in a personal way beyond the transactional drudgery of the corporate daytime.

In a culture that endows rituals such as brewing tea with a professional sophistication, it is unsurprising that business dinners in Japan are often elaborate affairs, elevated to a form of performance art. Great care goes into the choice of venues, attendance rosters -- the hierarchy among the hosts must be exactly matched among the guests -- and the small gifts offered by the guests as a return of favor, which must be held discreetly by the restaurant until the appropriate "surprise" moment. Details matter in Japan.

The downside of this formality is that without a bilateral willingness to open up, such dinners can signify little more than gestures, where conversations remain superficial. As a management consultant, I have had my share of such occasions, where everyone politely and secretly yearns for the dessert.

But settai dinners can be highly effective and enjoyable if there is a genuine openness between the participants. The short-term benefit for business is that in semiprivate conversations both parties lower their guard and share views kept hidden in daytime meetings. Such exchanges help to grease the high-context wheel within the official sphere. I might, for example, gain insight into the real reason why a certain stakeholder is against a project under discussion, allowing me to plan how to ease the pain.

Then there is the long-term benefit of building trust between two parties. "Through informal conversations over dinner, you come to appreciate different sides of your counterparts, which enhances trust," one senior banker told me.

Gaining access to private thoughts and building relationships are time-tested merits that business dinners bring about. But the banker also identified a new trend: getting fresh perspectives from serendipitous encounters. Here the emphasis is on a "chemical reaction," as he put it, which is often realized through the introduction of a third party to the occasion.

A departure from the classic mirroring of hierarchy on the host and guest sides for prearranged harmony, this is a more individualized and modernized approach to settai. "The multiplier effect of the right individuals meeting is phenomenal," the banker said. "Being able to orchestrate such occasions is a great, transferrable skill set."

Business-social events within the settai framework not only benefit corporate dealings but also remind us of the human aspects of work, providing us with opportunities to spend time with new people outside the circle of family and friends. We need not always make lifelong friends out of business contacts, but the process certainly expands our mental capacities.

In the post-pandemic era, when most business activity shifted online due to health dangers of face-to-face meetings, it is easy to write off in-person activities as frivolous. But I take solace in the knowledge that behind any business conversation there is another human being, not an AI-enabled robot.

Offline and in-person activities remind us of who we are. Whether with internal or external parties, business dinners play a worthy role in building trust. Rather than shying away from settai, companies and workers should harness its full power.

This article was originally published by Nikkei Asia on January 17, 2024.