"Corruption and Governance in Asia"

Reviewed by Kae NOMURA (Waseda University, GLOCOM Platform)

Review:

Some blame it on globalization while others blame it on human greed; whatever its many causes are, corruption has become a rampant problem in business. From the famed Enron case of the United States to lesser known cases of money laundering, anti-corruption measures have become an integral part of everyday business. Practicing good corporate governance has become a crucial component in maintaining a sound business in today's world.

Although improved technology and globalization in general has significantly increased the frequency of business transactions around the world, a distinct style of business conduct that is unique to each nation continues to exist. A particularly distinct disparity lies between Asia and the western world, largely due to cultural differences, and this disparity extends into problems of corruption. There are certainly similar cases of corruption around the world, but culture-specific decorum leads to differences in the way business is perceived and governed, which then leads to variations in the problems that arise.

This book offers the readers a look into governance and corruption in Asia. Comprised of thirteen academic papers written by various professors and professionals from around the world, it is written in a way that allows the typical lay person to understand it. However, it can also be a valuable source of knowledge for practicing businessmen and women who wish to gain a better understanding of Asian commerce. All of the papers are academic in nature but are not awash with business jargon nor complicated graphs and charts. Rather, most of the papers present interesting information and maintain clarity and fluidity from start to finish.

The editors have organized the articles wisely; starting with two articles that offer an overview of governance and corruption, then developing into more specific topics, and concluding with articles that offer possible courses of action. Although reading all thirteen articles in chronological order is not required to enjoy this book, doing so will give the non-business reader the best overall experience.

Not only does the reader leave with a better understanding of governance in Asia, some of the papers offer a distinctly unique and intriguing aspect of corruption and governance. There are two such papers in particular: "The Competitive Advantage with Chinese Characteristics – The Sophisticated Choreography of Gift-Giving" and "Taming the Sokaiya: Can Economic and Corporate Reform Eliminate Extortion in Japan?" The former offers a look into the importance of personal connections (guanxi) in Chinese culture and the prominent role that gift-giving plays in developing these guanxi. Japanese readers will find this to be a familiar topic, but will find that in many respects, it is of a much deeper, complex issue in China. Readers who are not familiar with such gift-giving practices may be surprised by its complexity and its role in making or breaking business deals.

The latter paper discusses the Japanese sokaiya, who are shareholders that threaten corporations with harassment and false allegations at the stockholders' general meetings if they are not paid a designated amount of money. Regardless of whether one is versed on the workings of the sokaiya or not, the paper presents an interesting look into their history and the efforts that have been made in controlling them. Of great interest is the largely indifferent, resigned attitude that many of the corporations have regarding the sokaiya, but one will learn from this paper that such an attitude is not just a matter of resignation, but also a matter of Japanese culture, one being the avoidance of loss of face.

As a compilation of several different papers, a downfall emerges with occasional repetition. While each paper presents an original outlook, some discussions, such as the definition of corruption and cronyism, appear in several places. As individual papers, this is not a negative aspect, but if the book is read straight through, progressing from one article to the next, one will come across identical topics more than once.

As corruption continues to be an international problem, it will become increasingly important to understand how governance works around the world. Where there are similar ideas and concepts, there are also striking differences from country to country. It is no longer sufficient to be familiar with one school of thought regarding the proper business conduct, and this book is a worthwhile read for anyone interested in expanding their knowledge of corruption and governance.

Contents:

1. The 'Oppression' of Governance? John B. Kidd and Frank-Jürgen Richter
2. The Challenge to Corruption and the International Business Environment Stephen Dearden
   
3. Poor Corporate Governance, Market Discipline and Cronyism in the 1997 Asian Crisis Christopher Gan
   
4. A Two-Stage Model of Cronyism in Organizations: A Cultural View of Governance Naresh Khatri, James P. Johnson, Zafar U. Ahmed
   
5. Understanding the Mind of the Chinese: A Historical Perspective Sui Pheng Low
   
6. The Competitive Advantage with Chinese Characteristics – The Sophisticated Choreography of Gift-Giving Matti Nojonen
   
7. The Economics of Corruption and Cronyism – An Institutional Approach to the Reform of Governance Barbara Krug and Hans Hendrischke
   
8. Taming the Sokaiya: Can Economic and Corporate Reform Eliminate Extortion in Japan? Teri Jane Ursacki
   
9. Fighting against Corruption: The Japanese Approach to Reform Corporate Governance　Maiko Miyake, Kathryn Gordon, Iwao Taka
   
10. Singapore's Anti-Corruption Strategy: Is this Form of Governance Transferable to Other Asian Countries? Jon S. T. Quah
    
11. A Human Resource Development Program to Foster Individual Moral Development in Indian Corporations: Aligning Corporate Governance with Natural Law Dennis Heaton, Thomas Carlisle, Ian Brown
    
12. Corruption in Asia – A Bottom-up Approach to its Resolution Paul Robins
    
13. Doing the Right Thing – Incorporating the Ethical Imperative into the Sustainable Development Process Hock-Beng Cheah and Melanie Cheah