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Cronyism: a cross-cultural analysis

Abstract

The devastating economic effects of the Asian financial crisis and US corporate scandals have underscored the need to strengthen corporate governance provisions. Although cronyism has been suggested as a leading cause of the two crises, it has received little attention from scholars. In this paper, we analyze the concept of cronyism and argue that it comes in various guises arising from different motivational bases and power dependence relations. We distinguish cronyism from related constructs and posit that it is a form of corruption with different dynamics from other forms. We advance propositions on its likelihood of occurrence across cultures and develop a typology of cronyist exchanges.

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Figure 1

Notes

  1. 1.

    Wa refers to the value that Japanese place on group consensus and loyalty, whereas inhwa refers to harmony between unequals, such as people who are unequal in rank or power (Alston, 1989).

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Acknowledgements

We would like to thank Kwok Leung (Departmental Editor), three anonymous referees, Parthiban David, Chris Earley, Luis Gomez, Roy Lewicki, Mike Peng, Abdul Rasheed, Harry Triandis, Lai-Si Tsui-Auch, and seminar participants at the Nanyang Technological University and the National University of Singapore for their valuable and constructive comments.

Author information

Correspondence to Naresh Khatri.

Additional information

Accepted by Kwok Leung, Departmental Editor, 29 June 2005. This paper has been with the author for two revisions.

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Khatri, N., Tsang, E. & Begley, T. Cronyism: a cross-cultural analysis. J Int Bus Stud 37, 61–75 (2006). https://doi.org/10.1057/palgrave.jibs.8400171

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Keywords

  • cronyism
  • individualism
  • guanxi
  • corruption
  • cultural syndromes
  • relational models