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Car tel in Japanese
constr uction
industr y
Prepared By:
Tao Xiaoming
Situ Pradhan
Jush
Shreshta
Pishen
Umirbekov
S.M.Arifuzzaman
www.themegallery.com

2. • People of the same trade seldom meet together,
even for merriment and diversion, but the
conversation ends in a conspiracy against the public,
or in some contrivance to raise prices. It is impossible
indeed to prevent such meetings, by any law which
either could be executed, or would be consistent with
liberty and justice.
Adam Smith

3. Introduction
What is collusion?
-Limit open competition
-Gaining an unfair advantage
What is Dango??
-Consultation
-Few companies controlling the industry in Japan
-Main winners in tenders for public construction work
-Related with bribery and networking with official bodies
How they work???
-Government officials leak information
-BIG GUYS (YAKUZA)
-Share profit among the AMIGOES

4. Ethic Issues in Cartel
Dango violated the nature of market competition in the way of practicing
economics of collusion.
Against antitrust law with dishonest business practice
Increase the level of corruption
Gangsters are used to enforce the collusive agreement
Play with tax money results in welfare loss for the public
Inefficient in economy

5. Why cartel still in practice
in Japan and other countries?
Officials Support of Government,
officials and Politicians
Gangster Controlled by Gangsters
People are scared to file a
Fear
case
Mutual benefit for all parties
Benefit involved

6. The Various Stakeholders Involved
Illegal under Antimonopoly Act
Ceiling price is leaked to the bidders
Motivated by simple bureaucratic caution
Government/ New Public-safety rationale policy
Policies entrants Prevents foreign firms
and Law
Price inflation Tax
Tax money wasted payers
largest single source
Political corruption
Parties

7. The Various Stakeholders Involved
Dango Specialists:
 Only few managers involved.
 Divorced from the direct company
Gangsters “Yakuzas”:
 Relations with the
power holders
 Immediate means of
Dango enforcement

8. Ethical Dilemmas
Japanese long tradition of gift giving has
Dimension turned into the form of offering kickbacks
1 which is against their own cultural norms
Dimension The gift giving culture actually competes with
Japanese own legal system
2
In Business relations networking became so
important that without it no deal is settled.
Dimension Members in network expect & enjoy benefits
which cause huge social welfare loss as well
3 as social value loss.

9. Analysis of Business Practice

10. Theoretical Comparison
Motivated by their own interest and set
Egoist Theory ethical standards accordingly
Unlike other culture gift giving is pretty common in
building business relations.
Cultural But it spread broadly & took the shape of kickback
Relativism which is against their cultural norms
They are highly profit centric and they want to achieve it
Immoral taking advantage of legal system or anything
Management

11. Recommendations
Strict legal actions for people involved in bribery
Penalize Govt. officials for leaking information
Allocate optimum fund for construction
Overseas companies should be allowed to bid
Govt. should explore other domestic bidders

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