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
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: