GOVERNMENTAL INTERVENTION IN CORPORATE CRISES – AN ASIAN PERSPECTIVE

Abstract

Governments are expected to intervene in national crises like natural disasters (Rosenthal & Kouzmin, 1997). Less clear are corporate crises. In recent years, there have been several corporate crises in Asia where governments have intervened to restore confidence. The paper seeks to examine the roles and extent of Asian governmental intervention in corporate crises, particularly it examines the impact Asian governments – described as paternalistic (Shin & Sin, 2012) – have on corporate crises. Five high profile Asian corporate crises were analyzed through Winkler’s (1977) Theory of Corporatism. Impact was analyzed through Boin and ’t Hart’s (2010) nine crisis response performance indicators. Governmental intervention is necessitated by crisis severity and urgency, the organization’s crisis history, the inability of the organization to manage, and when national interests are threatened. This paper is arguably one of the first studies to explore corporate crises where the initial attribution of crises responsibility lies with private organizations,government’s role in corporate crises from an Asian perspective. It helps government practitioners understand the issues and challenges of governmental intervention.