Small Business

An Education in Corruption


By Lisa Bergson "The Singaporeans are too honest to sell in China," a Singaporean candidate for our position as Asian regional sales manager tells me. I'm in this tiny, jewel-like city-state to conduct interviews before heading to gritty Taiwan to see customers. This visit, my fourth to Asia, turns into a crash course in corruption, what one skilled Taiwanese practitioner euphemistically calls the "Chinese business model." Call it graft.

While dominated by folks of Chinese origin, as he sees it, Singapore have been purged of this tradition. "In Singapore, when you run up against a rule, you stop. In China and Taiwan, if a rule gets in your way, you go around it," a business contact I'll call Jack explains, the signature tip of a Mont Blanc peeking from his shirt pocket. Listening to Jack's talk of intrigue and deal-making, I feel like I've stepped into a B movie populated by heavies in dark, ill-fitting suits.

TOUGH CUSTOMERS. Over the years, I've known some bruisers, but there is something especially hard lurking behind his and his partner's smooth, round facades. They are the kind of guys other guys like to drink with and confide in. It is an attribute they use to their advantage. "You have to get to know the customer, not just in a business way," Jack elaborates. "If you get close, you will start to get information -- and with information, you can win." Indeed, Jack's small startup just snatched a large contract from a billion-dollar multinational opponent. "They don't understand the Asian way," he sneers.

"They don't have Chinese working for them?" I ask.

"Yes, the sales manager is Chinese, but he's born in America -- so he's not really Chinese."

Singaporeans bear the same stigma, it seems. "We are bananas, yellow on the outside, but white on the inside," quips another candidate. "We are Chinese by origin, but our schools and government are British." Up until recently, the ability to assimilate Western behavior was an advantage for Singaporeans, whose anomalous nation relies on trade for survival. With the rise of mainland China as an economic power, Singaporeans now must scramble if they are to compete with the Taiwanese inside track.

"Read Thick Face, Black Heart," my Singaporean headhunter urges, referring to author Chin-Ning Chu's take on a philosophy laid out in Robert J. Ringer's 1993 book Winning by Intimidation. "Then you will really understand the Chinese way. They are very tough." Going from Singapore's cultivated tropical beauty to scruffy, irreverent Taiwan, the difference is palpable. It's a frontier culture in Taiwan, a thoroughly macho one, where men belch, swagger, and play drinking games over lunch. What a contrast with proper -- and repressed -- Singapore. "In Singapore," laments one resident, "there are so many fines."

INHERENT CONTRADICTIONS. By the same token, if a Singaporean were to engage in the kind of bribery that appears commonplace in, say, the Asian petrochemical industry, "your career would be ruined forever," swears one candidate. In the U.S., our Foreign Corrupt Practices Act strictly forbids such conduct. Yet the U.S. supports regimes in China, Indonesia, and the Philippines, not to mention the Middle East, where such practices are reportedly rampant.

Such contradictions pose a dilemma for Singaporeans under pressure to export, just as they do for Americans hell-bent on globalization. Take the experience of one young salesman in Indonesia where, as he puts it, bribery is business. "I started by wanting to protect my integrity," he recalls, without a trace of irony. "But you can't run away. You must work with the people who know powerful people." Very quickly, this fellow learned the ins-and-outs. He learned how to manage corruption: "The important thing is, you must always be in control," he confides. "Otherwise, you will wind up with either too many intermediaries or you'll be betrayed. You can't let go."

Each nation seems to have its own mix of corruption. In Malaysia, it's said to be the government that has its hand out. Even so, "It's subtle -- they'll drop hints. Then you can ask, 'Is there more that you want?'" according to another regional sales manager. Not incidentally, in Malaysia, I'm told only Malay nationals have "the link". I suppose this falls under the heading of what they don't teach you at Harvard Business School.

HIGH ROADS, LOW TACTICS. In Singapore, by contrast, the government is viewed as squeaky clean. For businesses, the most commonplace and condoned form of consideration is the "training" visit to the U.S. In my experience, the training junket is not unique to Singapore or Asia for that matter. During a vacation in Vail last winter, I met a woman who was looking forward to an easy-going, three-day weekend, an annual event that Boeing hosts for purchasers from the major airlines at posh Beaver Creek. "All the big companies do it," she asserted when I questioned the ethics.

Of course, there's a difference between entertaining for business and outright bribery. Then again, the Chinese business model may not be so foreign after all. As one soft-spoken Singaporean sales manager puts it, "It's always, 'Do you take Route A or Route B?' If you take Route A and go by the book, you can wait until kingdom come to get anything done. Or, you pay the bribe and go Route B." Lisa Bergson is President and CEO of both MEECO and Tiger Optics. Before joining MEECO in 1983, Lisa Bergson worked as a business journalist at BusinessWeek and freelanced for many business publications. You can visit her companies' Web sites at www.meeco.com and www.tigeroptics.com, or contact her at lbergson@meeco.com


Toyota's Hydrogen Man
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus