As often happens, the prevailing cultural norms of society are reflected in the business structure of the country.
Therefore, businesses tend to be extremely hierarchically organised with decision-making controlled at the top by either a small group of senior managers or by the senior family member.
A sense of hierarchy permeates the whole organisation with employees preferring the manager to make decisions and allocate tasks. Initiative, proactive thinking etc. are not really viewed as positives or even desirable as they could be seen as an implied criticism of the manager and the structures of the organisation.
Promotion and selection are often based more along relationship lines than on pure performance criteria (as viewed from the western perspective.) Thus, nepotism is rife in Indonesia and viewed with little or no concern. The high-profile cases surrounding the Suharto family amply illustrate how deep-rooted family ties are in the region. Indeed, as connections with the government or other organisations are the key to success, it could be argued that promotion through family connection is probably the most effective approach under the circumstances.
The hierarchical nature of most organisations in Indonesia has given rise to the development of a vast and unwieldy bureaucracy – and this is especially true when dealing with the civil service. (Civil servants who are notoriously badly paid very often have two jobs and are, therefore, not always at their desks to perform the service you require – patience is often sorely tested.)
Written and Produced by Keith Warburton
This country profile has been produced to give a short overview of some of the key concepts to bear in mind when doing business with contacts in Indonesia. It is intended to be an aid to business people who have commercial dealings with counterparties in the country but should not be seen as an exhaustive guide to this topic or as a substitute for more substantial research should there be a need.
With this in mind, we have covered the areas which are key to a better understanding of the cultural mindset underpinning business dealings in Indonesia and which are, quite often, extremely different from the approach and thought processes associated with business in other parts of the world.
Therefore this briefing note is broken into short, bite-sized sections on the following topics: