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Title: Ethnic Chinese business groups in Southeast Asia: a case from the inside
Author: Chen, Kuan Cheng
Awarding Body: University of Manchester
Current Institution: University of Manchester
Date of Award: 2003
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Ethnic Chinese business groups, a dominant form of capitalism in Southeast Asia, are important to regional economic development. Although this form of business organisation has attracted the attention of scholars from different epistemological perspectives, related research has focused mainly on conceptual discussions, leaving this form of organisation itself enigmatic. This research aims to elucidate this form of business organisation from the inside. Four research themes are explored and expanded upon to provide a complete picture of the organization. The first three themes examine the rapid development and impressive performance of these groups, their opaque operations made possible under the pyramid structure, and the art of ethnic Chinese management. Given the changes that have occurred in the institutional landscape in the post-Asian financial crisis period, the fourth research theme explores the corresponding changes made in the distinctive characteristics. Two bodies of literature are of relevance to this study, concerning the economic organisation and dealing with the distinctive features of ethnic Chinese business in Southeast Asia or ethnic Chinese business in general. Synthesis of different epistemological backgrounds by sociologists, geographers, economists, anthropologists, historians, psychologists, political scientists and management theorists provide a template to explain the complicated phenomena of the four research themes. The research strategy is an embedded single case study, which is justified for Indonesia's largest ethnic Chinese business group and richest family. Primary data were collected through participation-observation, field notes and interviews. Secondary data collection methods included documentation and archival records. A covert method was adopted for it best fitted the purpose of the research and the murky nature of the ethnic Chinese business groups in Southeast Asia. An overt approach would have ensured a premature end to an exploration of what the executives were actually doing within the organisation. To achieve equilibrium among academic veracity, privacy protection, professionalism, respect of anonymity and prevention of harm to the case company, a confidentiality mechanism was developed. While the existing literature argues that theorising ethnic Chinese business groups in Southeast Asia or ethnic Chinese business in general is very difficult, this thesis marks a novel milestone by introducing an integrated model. The model is distinct in two perspectives - it adopts the multi-discipline approach by first incorporating the large diversity concept and variables into analysis of the four research themes and then examines what the top management do and their mindset through participating in the inner circle. Thus, the model covers the broader concept underlying the distinctive features of Southeast Asian Chinese capitalism under analysis rather than just presenting the story of a single experience of the case company. The findings on the development theme indicate that the ethnic Chinese entrepreneurs in Southeast Asia excel in their ingenious use of business diplomacy to spin a success web around such factors as the state (state policy, political elite and connections), capital (financial leverage and foreign partners), and society (ethnic and indigenous networks), to facilitate rapid development and create an impressive performance. Under the organisation theme, the research finds that the complicated pyramid structure provides an excellent design for opaque operation. Findings on ethnic Chinese management suggest that it is more an art than a science. Finally, findings on the fourth theme point to distinctive characteristic changes in the success pattern and impressive performance of the Southeast Asian ethnic Chinese business, while family ownership, pyramid structure and ethnic Chinese management remain practically unchanged in the post-Asian financial crisis era. The classical Confucian thoughts and traditional Chinese culture deeply influenced the fixed mindset of the founder family. However, when reflected in the business operation, such mindset offers conflicting explanations to the characteristics of modern-day ethnic Chinese family business. In addition, the refugee mentality of the ethnic Chinese in the hostile environment also affected their business operation pattern. As a result, the consequences are unstable growth and performance, opaque operation, loss of corporate vitality, and the precedence of family interest over state and investors' interest.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available