Pitfalls When Doing Business Abroad

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• Corruption, nepotism and graft

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  Eunhee Kim

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  Corruption, nepotism and graft

  Being from Korea, living in Europe, I see the corruption in Asia is more unusual in Europe (at least northern).
  How do Europeens feel about the corruption they are confronted with when they come to Asia? I'd like to hear your opinions.
  This post was modified on 13 Jan 2006 at 10:38 am.
  • 13 Jan 2006, 10:37 am
  Eunhee Kim wrote: > Being from Korea, living in Europe, I see the corruption in Asia is > more unusual in Europe (at least northern). > How do Europeens feel about the corruption they are confronted with > when they come to Asia? I'd like to hear your opinions.
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  David Petherick    Group moderator

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  Re: Corruption, nepotism and graft

  I have little experience in Asia, but Corruption, Graft and Nepotism are the same everywhere. I think that these things are perhaps less prevalent than in, say Russia or China, and perhaps better hidden in Europe.
  
  There is also the matter of The Law - if it protects people and property, it works to lessen Corruption, Graft and Nepotism. If not... then not.
  
  • 13 Jan 2006, 3:45 pm
  David Petherick wrote: > I have little experience in Asia, but Corruption, Graft and Nepotism > are the same everywhere. I think that these things are perhaps less > prevalent than in, say Russia or China, and perhaps better hidden in > Europe. > > There is also the matter of The Law - if it protects people and > property, it works to lessen Corruption, Graft and Nepotism. If > not... then not.
• 
  Eunhee Kim

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  Re: Corruption, nepotism and graft

  How about in the USA. I have heard different opinions about that. Is there a lot of corruption there?
  
  • 13 Jan 2006, 8:35 pm
  Eunhee Kim wrote: > How about in the USA. I have heard different opinions about that. Is > there a lot of corruption there?
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  Ki-sung Chi    Group moderator

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  Re: Corruption, nepotism and graft

  Korea was one of the most corrupted countries in the past. But in the recent years things have changed drastically. I'm now living in Seoul again for 3 years and can report that Korea has progressed a lot. Of course, the corrption level is still higher than Western Europe but I see a dramatic change. And I experienced myself that some of my counterparts at Samsung were fired because they played Golf with some vendors. This wouldn't have happened few years ago...
  
  • 14 Jan 2006, 3:30 pm
  Ki-sung Chi wrote: > Korea was one of the most corrupted countries in the past. But in the > recent years things have changed drastically. I'm now living in Seoul > again for 3 years and can report that Korea has progressed a lot. Of > course, the corrption level is still higher than Western Europe but I > see a dramatic change. And I experienced myself that some of my > counterparts at Samsung were fired because they played Golf with some > vendors. This wouldn't have happened few years ago...
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  Philipp Rathjen    Premium Member

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  Re: Corruption, nepotism and graft

  I can agree with K-sung Chi. I have worked with Korean clients expanding towards Europe and also experienced great professionalism. However, I certainly was far away from looking beyond the curtains, but Korean multinationals increasingly take up international standards. It is certainly a great transformation, also due to the former family/ clan driven structure of the chaebols. The view on what is "corruption" etc. has also been different. The change might look different with governmental authorities (which I don’t know). In last year’s transparency corruption index, Korea ranked 40, however, at the same level as Italy and before Greece, for instance, just to mention "western" countries. (http://ww1.transparency.org/cpi/2005/cpi2005.sources.en.html).
  
  • 19 Feb 2006, 9:38 pm
  Philipp Rathjen wrote: > I can agree with K-sung Chi. I have worked with Korean clients > expanding towards Europe and also experienced great professionalism. > However, I certainly was far away from looking beyond the curtains, > but Korean multinationals increasingly take up international > standards. It is certainly a great transformation, also due to the > former family/ clan driven structure of the chaebols. The view on > what is "corruption" etc. has also been different. The change might > look different with governmental authorities (which I don’t know). In > last year’s transparency corruption index, Korea ranked 40, however, > at the same level as Italy and before Greece, for instance, just to > mention "western" countries. > (http://ww1.transparency.org/cpi/2005/cpi2005.sources.en.html).
• 
  Antti Tumelius

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  Re^2: Corruption, nepotism and graft

  I think there are a few cultural issues with this. I don't think you can just import Western ideas of transparency that easily to asian context. They have been involved in nepotism for so long, that it is more of a social norm. For a normal Finn, favoring their own kin would make them look quite bad in society. But considering confusian principles, the Chinese guy is almost expected to favor his kin. Also considering the institutional factors, the family are the only people you can count on. That's one of the reasons why there is so many family companies (even in advanced places like Hong Kong).
  
  And corruption is everywhere there is an incentive to bend the rules (or the rules are missing). For example Finland ranked 2nd in the TI 2005. But still there is corruption. The public administration is almost completely free from it (and very transparent), but due to small market size (and small circles) there has been accusations of cartells and so on (some even proved to be true). The big shots know each other and it is easy to informally agree on common pricing policies for example.
  
  • 16 May 2006, 02:55 am
  Antti Tumelius wrote: > I think there are a few cultural issues with this. I don't think you > can just import Western ideas of transparency that easily to asian > context. They have been involved in nepotism for so long, that it is > more of a social norm. For a normal Finn, favoring their own kin > would make them look quite bad in society. But considering confusian > principles, the Chinese guy is almost expected to favor his kin. Also > considering the institutional factors, the family are the only people > you can count on. That's one of the reasons why there is so many > family companies (even in advanced places like Hong Kong). > > And corruption is everywhere there is an incentive to bend the rules > (or the rules are missing). For example Finland ranked 2nd in the TI > 2005. But still there is corruption. The public administration is > almost completely free from it (and very transparent), but due to > small market size (and small circles) there has been accusations of > cartells and so on (some even proved to be true). The big shots know > each other and it is easy to informally agree on common pricing > policies for example.
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