InReview – Issue 38

Against All Odds: The Making of a Billionaire by Loy Hean Heong with Andrew Crofts; Singapore, Times Books International, 1997; 206 pp.

Loy was a famous Malaysian entrepreneur who built the MBf Holdings Group, a holding company with many interests; he died shortly after the book was published. His son, Tiek Ngan, has since taken over MBf Holdings Group (cf. IBTE Conversation with T. N. Loy in this issue).

The book opens when Loy was a child fleeing the invading Japanese army, escaping his family’s peasant farm to live in the jungle. Their pets became the food that allowed the family to survive.

In spite of growing up in such poverty, at an early age his father scraped up enough money to send his sons to school. Loy’s education and survival skills drove him “from one deal to the next” for most of his life. He started with a failed business in truck repair. After learning that “failure is the mother of success,” he became a land developer, created a special brand of tape, introduced bar code readers to Asia, entered banking and financial businesses, and for-profit education. He later played a leadership role in defining how business would contribute to the development of Malaysia.

He frankly acknowledged that while he cared deeply for his family, he had little time for them personally. He viewed his role as providing opportunity for them. He was given the title of “Dato” in 1974, received a Ph.D. in Business Administration in 1992, was honored as the “Most Innovative Financier” by the International Real Estate Federation in 1992, received a Ph.D. in Law in 1994, and became the first Asian to join the International Board of Directors of MasterCard in 1995.

I came away from the book with new insights, but with mixed emotions about a man with incredible drive, accomplishing great things, yet seemingly always trying to prove himself. The book ends with few clues as to the close proximity of his death or the fragility of his empire at the time of the Asian financial crisis.

The book is a fast-paced account of a fascinating, complex person. I recommend it.

Reviewed by Al Erisman

◊ ◊ ◊ ◊ ◊

World on Fire by Amy Chua; New York, Doubleday, 2003; 340 pp.

Amy Chua is a Filipina of Chinese ethnicity who is on the faculty of the Yale Law School.

This is a controversial book that does not fit neatly into a partisan camp. Based on her solid understanding of economics and culture, she reviews experiences of different countries of the developing and under-developed world to explain why the attempts of several U.S. administrations and its institutional agents (The World Bank Group, International Monetary Fund) to export a pure form of market liberalism have largely failed.

Her thesis is that most developing and under-developed economies are controlled by a market dominant minority. Often the minority comprises an ethnic identity. In Myanmar, the Philippines, Indonesia, and Thailand it is the Chinese; in Sierra Leone it is the Lebanese; in Kenya it is the Indians; in Russia it is the Jews; and so forth. There are other cases in which the market dominant minority has rather murky or questionable hereditary roots; a contemporary case is Venezuela where Hugo Chavez has established himself as a populist aligned with a disenfranchised majority.

The consequences of pushing market and democratic reforms on such developing countries is that it produces the unintended consequence of consolidating wealth in the hands of those who are already in a dominant position. That is, imposed reforms play into the hands of those who are already key players in the markets of their homelands, and this exacerbates the condition of the majorities who are not key participants in these economies. It is ironic, if not hypocritical, that such institutional “tough love” is something that the U.S., the U.K., and Western Europe have all eschewed over the course of the twentieth century. The works of Dickens, Lewis, Zola, and, more recently, Grass have impelled governments of all persuasions to institute protections against unfettered markets and to secure basic rights of minorities in the U.K., the U.S., France, and Germany.

Professor Chua’s argument turns fundamentally on what one understands property and property rights to entail. Zealots have incited majorities to reclaim what is “rightfully” theirs. For example, in Rwanda, Hutus slaughtered Tutsis, who they perceived to earn privilege from their Belgian colonizers; in Indonesia upon the resignation of Suharto, the majority pribumi went on violent rampages for days against ethnic Chinese whom they perceived Suharto to favor.

For the majority in the U.S., questions of ethical transgressions in the cases of Enron, Parmalat, and Tyco can be resolved within the institutional machinery of a developed Western culture. By Amy Chua’s account, for the disenfranchised majority in the developing world, questions of ethical transgression in the distribution of wealth can spark grotesque acts of violence. The policy issue for Americans is whether we need to recast good intentions in helping developing nations with more thoughtful, culturally relevant strategies.

Reviewed by David Gautschi

◊ ◊ ◊ ◊ ◊

The Chinese TAO of Business: The Logic of Successful Business Strategy by George T. Haley, Usha C.V. Haley, and Chin Tiong Tan; Singapore, John Wiley & Sons (Asia), 2004; 329 pp.

George Haley is Professor of Marketing and International Business at the University of New Haven. Usha Haley is Professor of Management at the University of New Haven. Chin Tiong Tan is the Provost of Singapore Management University in Singapore. All have authored an extensive list of books, journal articles, and research papers.

This book is written for Westerners doing business in China as well as for Chinese people doing business in the West. From their research and interviews with almost thirty Chinese executives, the authors attempt to capture Chinese perspectives on business.

China looks to be the next great superpower in the world economy, but for Westerners, doing business with China is not easy. Besides the standard language and cultural barriers, there are vast differences in history, the role of law, ethics, and strategy. Understanding these differences is essential to global business ventures involving China. Building bridges based on understanding is what this book is about.

Some observations that may surprise those who have not been involved with China:

“Loyalties do not extend beyond the individuals; hence, companies cannot expect goodwill to extend beyond the tenure of the executives that earned it.” (p. 13)

“China did not develop a legal system, or even written laws, until the twentieth century.” (p. 15)

“Neo-Taoism … has coalesced with Confucianism and Buddhism to provide a uniquely comprehensive Chinese economic and ethical perspective which Western managers should understand if they wish to operate effectively in China without compromising their own standards and principles.” (p. 31)

“China is close to overtaking Japan as the world’s second largest online Internet population.” (p. 260)

The authors do an admirable job in assembling lots of material in a short book that is readable and persuasive. I read this book in preparation for a two week trip to China in which I interacted with many business people. My trip confirmed many of the guidelines laid out here. I recommend this book.

Reviewed by Al Erisman

◊ ◊ ◊ ◊ ◊

Asia’s New Crisis: Renewal Through Total Ethical Management by Frank-Jurgen Richter and Pamela C. M. Mar; Singapore, John Wiley & Sons (Asia), 2004; xx, 345 pp.

Frank-Jurgen Richter is Director of the World Economic Forum in charge of Asian affairs. Pamela C. M. Mar is Associate Director, China, for the World Economic Forum.

Richter and Mar recruited 24 writers including CEOs, government leaders, NGO directors, and professors to write chapters in their book. They selected these essays to fill in five major sections: Asia’s Ethical Crisis, Foundations (an overview of religious influences in Asia), Applications (areas where ethics has significant impact), Transformations (change and its processes) and a Summary. Each essay is well-written, filled with facts, examples, and strongly held views dealing with particular areas of business ethics in Asia. Richter and Mar wrote several essays themselves, and created overviews for each section to provide the context.

The authors don’t necessarily agree with each other, but the tension that is created between these views is part of the strength of the book. I was particularly struck by the perspectives on the ethical crises in the U.S. A Chinese author said, in reaction to Enron, “It was called the ‘American Yinguangsia’ in the Chinese media” in reference to a similar scandal at a Chinese business, p. 184. A Japanese writer said, “Cases such as Enron illustrate that the chain of distrust is not confined to Japan,” p. 232.

Any criticisms of the book? There are the usual problems with a book pieced together from multiple authors. In the Foundations section, for example, the authors writing on Buddhism did a good job of laying out the principles of Buddhism, then commenting on their relevance to business and business ethics. The authors dealing with Hinduism and Islam, on the other hand, said very little about the religious principles, focusing rather on the cultural environments of India and Malaysia. There was no section on Christianity because of its minimal influence in Asia, ignoring the significant impact in South Korea and Singapore.

The first essay by Lou Marinoff seemed to me to be the weakest of the book, unfortunate since this is where most readers get their start. From his vantage point as Professor of Philosophy at City College in New York, he didn’t write convincingly about business or Asia, and let his personal issues interfere with his perspective, such as his comment, “The three remaining bastions of collective totalitarianism are Cuba, North Korea, and the North American Academy.”

But these weaknesses are rather minor compared with the power of this book. Anyone doing business in Asia, working with suppliers in Asia, investing in Asia, or simply interested in multiple Asian perspectives on global business should read this book. It is a wonderful achievement dealing with a timely, important subject. I highly recommend it.

Reviewed by Al Erisman