Criminality and Business Strategy: Similarities and Differences

218 Pages·2022·3.886 MB·English

by  John Zinkin, Chris Bennett

JohnZinkin,ChrisBennett
CriminalityandBusinessStrategy

John Zinkin, Chris Bennett
Criminality and
Business Strategy
Similarities and Differences
ISBN978-3-11-071189-9
e-ISBN(PDF)978-3-11-071215-5
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Advance Praise for Criminality and Business
Strategy: Similarities and Differences
“Allgreatworkscomeintrilogies.Thefirstmakesthename,thesecondconsolidates
it, and the third either takes ittogreater heights or disappoints. Havingmade their
nameinThePrinciplesandPracticeofEffectiveLeadership,corporategovernanceex-
pertsJohnZinkinandChrisBennetthaveembarkedontwosequels,Criminalityand
Business Strategy: Similarities and Differences, to be followed by The Challenge of
LeadinganEthicalandSuccessfulOrganization(tobepublished).
Criminality and Business Strategy: Similarities and Differences is a subject most
peoplewouldprefertosweepunderthecarpet.Buttheissueofcriminality,bystates,
firmsandindividuals,liesattheheartofgoodleadership.Justasethicalindividuals
findithardtosurviveincriminalfirms,sodofirmsfindithardtooperateincriminal
states,oratleastverycorruptones.
Thisbookreviewscasesofstatecriminality,organizedcrimesfromMafiaandTri-
ads to Yakuza, and draws insights that are invaluable to the practicing corporate
leader.No leader can be naïve as tothe challengesof operatingincorruptingenvi-
ronmentsandthisbookprovidesgoodadviceonhowtodiagnoseandthinkthrough
criminalityincontextanddetail.Thebestbusinessessurviveandprosperbecauseof
strongethicsandprofessionalteamwork.Tobuildthatteamwithvaluesisthehall-
markofallgoodleaders.Thatiswhythethirdbookinthistrilogyiskeenlyawaited.”
–AndrewSheng,formerCentralBankerandChairman,
SecuritiesandFuturesCommission,HongKong
“Theauthorsofthisbookareexcellentdebaters–theyexamineargumentsfromall
angles to ensure that they are completely watertight. Here, they have taken a step
backanddiscussthebehaviorsandcharacteristicsofrecognizedgovernments,com-
paringthemwiththebehaviorsoforganizedcrimegroups.Takingthisverydifferent
perspective generates very surprising insights into the functioning of government,
the ‘monopoly of violence’ which governments claim, and the similarities between
the operational strategies of governments and crime organizations. It brings the
reader,mentally,intoaspacewhichfewhaveexplored,butoncethere,allowsasur-
prisingsetofnewinsightstoemergewhilereadingthebook.
Inaworldwhichisincreasinglydominatedbyautocratic‘bigmen’,anddemoc-
racy appears to be struggling to function effectively, these insights are particularly
important, an essential underpinning of thought for policy makers, politicians and
societalreformers.Thereaderwillhaveassumptionschallenged,the acceptedover-
turned, and the unacceptable contrasted with the acceptable. Reading this book, I
waschallenged and surprised – but wasnot able to reject the arguments made. At
https://doi.org/10.1515/9783110712155-202
VI AdvancePraiseforCriminalityandBusinessStrategy
thesametime,thebookispractical,downtoearthandthelessonscanbeappliedto
improvetheethicsofbothbusinessandgovernmentorganizations.
–EdwardClayton,Partner,CapitalProjectsandInfrastructureLeader,
PwC,MalaysiaandVietnam
“InCriminalityandBusinessStrategy:SimilaritiesandDifferences,andinparticularin
itsconcludingchapter,JohnZinkinandChrisBennettmakeitabundantlyclearthatif
a legitimate business isonly committedto makingprofits with little or no regard to
ESG goals, there will be little todistinguish it from organized crime anditthus may
runtheriskofforfeitingitssocial’licensetooperate’.”
–DatoDrR.Thillainathan,DirectorofGentingBerhad,
PublicInvestmentBankBerhad,IDEASPolicyResearchBerhad
“CriminalityandBusinessStrategymademequestionmybehaviorinwaysIwasnot
expecting,and cometo uncomfortable conclusionsasa result.I considermyself an
honest businessman.However,thisbook demonstratestomethatIexist ona spec-
trum.Mytransgressionsarearguablyharmless,butI,likeeveryoneinbusiness,have
concludedthattherearesomerulesthatareokformetoignore.Or,toputitanother
way,thatIamentitledtoignore.Irealisethatthereisacorrelationbetweenmyenti-
tlementandmylevelofinfluenceandfinancialcapacity.Themoreonehas,themore
rulesonemayignore,andthelessonehas,themoreconstrainedoneisbytherules.
Hardlyalevelplayingfield,butshockingwhenconsideredincontextofwherewesit
onaspectrumofcriminalityandbyextensiontherefore,themorewealthyorinfluen-
tial one becomes, the increased likelihood of also being more criminal. This book
challengesmetodecidewhetherthisisthesocietyIwanttoparticipatein,orindeed
topassontomychildrenforthemtobepartof.”
–TonyHeneberry,FounderofCEOSolutions
Acknowledgments
We were helped by many people in developing our thoughts, refining our argu-
ments,andstructuringthecase.WewouldliketothankDrGaryDirksandProfes-
sorSanderVanDerLeeuwfortheirearlycommentsonthepotentialforcriminality
in the political process. We would like to thank Professor Anna Sergi for her work
and insights into organized crime in Italy, and in particular for her work on the
‘Ndranghetawhichwehaveusedinthebook.Wewouldalsoliketothankthefol-
lowing for the time they invested in reading our drafts to ensure that the case we
make iscorrect, clear,and, relevant; based on their respective experiences as aca-
demics,companydirectoroflongstanding;seniormanagementconsultingpartner;
entrepreneur; central banker and capital markets regulator; and lawyer: Professor
John Rudd, John Colvin, Dato Dr R. Thillainathan, Edward Clayton, Tony Hene-
berry,TanSriAndrewSheng,andSujataShekarNaik.Ifwehavemisunderstoodor
misrepresentedtheirviews,thefaultisentirelyours.
WewouldliketothankStefanGiesen,ourexcellenteditor,forchallengingour
assumptionsrobustlyandconstructively,includingsimplifyingthestructureofthe
book. We are grateful to Mary Sudul, our copy editor, whose meticulous attention
to detail and care in improving the text makes the book all the better. We would
liketothankJayaDalalforherexcellentcoordinationofproduction,asusual;and
MatthiasWandforfinalproduction.
JohnZinkinandChrisBennett
KualaLumpur,Malaysia
https://doi.org/10.1515/9783110712155-203

Contents
Acknowledgments VII
Introduction XIII
Chapter1
TheCrimeContinuum:TheRoleoftheState 1
StatesasSuccessfulCriminalEnterprises 2
“Force”Theory 2
“Conflict”Theory 4
The“Jealous”State 5
StateCommittedOrganizedCrimes 9
DefiningCriminalBehavior(CB) 14
Felony 14
Misdemeanor 15
Offense 15
Infraction 15
Wrongdoing 15
Chapter2
TheCrimeContinuum–TheRoleofOrganizedCrime 21
DefiningCharacteristics 21
Mafia 24
ChineseTriads 29
HongKongTriads 32
TaiwaneseTriads 35
Yakuza 37
CrimeThatIsOrganized(CTIO) 42
Chapter3
TheCriminalHarmContinuum 49
BreakdowninLawandOrder 49
EconomicHarm 51
Wars 51
CivilWars 53
FinancialHarm 55
Fraud 55
Bribery 55
Corruption 57
X Contents
MoneyLaundering 58
CriminalEconomicHarm 60
SocialHarm 60
OrganizedCrime 60
ShadowEconomy 61
Chapter4
DoesthePunishmentFittheCrime? 67
Government 67
EnforcementofSanctions 68
Impunity 68
RegulatoryCapture 69
BriberyandCorruption 71
Inappropriate“Ecosystem” 73
Indifference 75
SocialAxiomsandAssumptions 75
Culture 75
Media 77
Chapter5
TheCriminalStrategyExternalContinuum 81
“PESTLE”Framework 81
PoliticalEnvironment 82
EconomicEnvironment 84
SocialEnvironment 87
TechnologicalEnvironment 96
LegalEnvironment 98
Environment 101
The“FiveForces”Framework 103
Head-to-HeadCompetitors 104
SupplierPower 104
BuyerPower 104
NewEntrants 104
AlternativesandSubstitutes 105
Chapter6
TheCriminalStrategyInternalContinuum 113
Mission,Vision,andValues 113
MissionandVision 113
HenryFord 115
MarksandSpencer 115