Corporate culture and competition compliance in East Asia

Abstract

Efforts to secure competition law compliance among commercial operators can usefully be tailored in a way that takes account of cultural characteristics. Since culture forms part of the conditions in which the development of a robust and credible compliance system occurs, it makes sense to approach compliance issues in a manner sensitive to that cultural background. In the context of East Asian enterprises, this implies a need to take account of the legacy of Confucian ethics, which has had a profound influence on the psychology and behavior of commercial organizations in the region. The importance of that legacy suggests that compliance will not be achieved within East Asian firms solely on the basis of the external legal environment, an environment in which deterrence-oriented factors such as sanctions and the threat of detection play a central role. More attention should be given to the internal moral and social environment, and to shaping the logic of appropriateness within a given firm. A compliance culture can thus be constructed on the basis of elements such as moral commitment, Eastern-style education, the cultivation of virtue, and the convergence of the interests of the enterprise and those of its employees.