Indonesian business characteristics are based firmly on the classic, Asian values of respect for hierarchy and people wishing to introduce a more matrix-oriented approach may find themselves struggling against the weight of history and culture
Always try to show respect for the hierarchy of the organisation you are dealing with, as well as the senior managers of that organisation. Try not to have middle-ranking employees from your company interfacing with the top-level managers from the Indonesian organisation.
Nepotism and cronyism are a fact of business life and it is essential to have the right contacts in the right places. It may be necessary to have locals make the initial introductions – and these introductions can prove expensive.
A combination of extreme dependency on hierarchy and nepotism has resulted in the development of extremely cumbersome bureaucracies. When dealing with these bureaucracies, patience is needed.
The manager is expected to take on the role of father with all the emotional and in-depth concern for subordinates that such a relationship entails. Respect for the manager comes from such bonding rather than from more task-oriented issues such as technical expertise.
Subordinates will give loyalty and dependability to those managers who are seen as worthy of respect.
Decision-making is either directional (coming from the boss) or, in peer to peer situations, is arrived at through lengthy consensus seeking discussions. The latter decision-making process can eat up a great deal of time but little can be done to speed up the process.
Meetings are usually formal occasions with formal body language and communication patterns used to try to create a sense of harmony and ease amongst the delegates.
Business cards are important and should be given out in a formal manner at the beginning of a meeting. Cards should contain as much information about you as possible.
Time seems to be less of an issue in Indonesia than in many other countries and it is not unusual for meetings to start late or finish late. (You could be kept waiting for up to an hour!
Contracts are seen as an expression of intent to do business rather than as an absolute statement. People expect the detail to evolve over time and would rarely refer back to the detail of an original agreement.
Never create a situation where a contact might lose face. This could jeopardise long-term business. Try to ensure that people are not placed in embarrassing or awkward situations.
English language levels are generally lower than in some neighbouring countries and translators may, sometimes, be needed. Take great care to speak clearly and use simple vocabulary.
Remain calm and composed at all times. Avoid any show of emotion during meetings and speak with a soft voice.
Try not to openly disagree with people as this can be interpreted as a lack of respect and will probably fracture the relationship. If you do not agree, keep coming back to the subject in a subtle, indirect way.
Do not assume that yes means yes. It could mean one of many things and can only be fully understood through gentle probing and questioning.
Expect to encounter more silences during meetings than in many other countries. Do not be stressed by these silences and allow the other side the time they need.
Gifts are often given and received. To avoid any whiff of corruption, give small, corporate-type gifts.
Many women work in Indonesia, often reaching positions of seniority. Female managers should maintain a professional, slightly detached manner with male colleagues.
Be aware of the usual Muslim sensitivities towards such issues as alcohol, pork, being touched by the left hand etc.
Written and Produced by Keith Warburton
Indonesia is complex. That is hardly surprising given the fact that the country spans thousands of islands, has over 300 languages and population of about 243 million (which is rising rapidly.) Navigating your way around Indonesia is both literally and figuratively difficult.
However, Indonesia is a country which has tremendous economic potential. The Indonesian government is working hard to try to reduce the country’s dependence on exports of (raw) commodities and to diversify into both the manufacturing and service sectors. In addition to this, vast sums are being pumped into the basic infrastructure of a nation which has suffered from some core infrastructure weaknesses for decades.
About 50% of Indonesia’s population are under the age of 28 which means that the country has a huge demographic dividend with large numbers of people about to enter the workforce. This younger generation is aspirational and consumerist in nature. It could be argued that internal demand for goods and services in Indonesia is about to explode in the next decade.
Many observers believe that, provided some form of political stability can be maintained, Indonesia represents a country with massive growth potential. If Indonesia is to achieve its potential it needs a great deal of external stimulus and support. It needs Foreign Direct Investment and it needs skills and expertise. Indonesia probably needs your goods or services and you are advised to seriously consider Indonesia as a future market if you are not already operating there.
However, Indonesia is a thoroughly Asian country with a rich and unique business culture. The Indonesian approach to business is heavily relationship focused. You need to take time to develop deep and lasting alliances and you need to really understand Indonesian business culture if you are to avoid alienating potential partners.
This country profile provides an overview of some of the key aspects of Indonesian business culture in a concise, easy to follow-format. The document includes information on: