Consumer protection spells reform

Consumer protection spells reform

Ronald Nangoi, Contributor, Jakarta

Much progress has been made with democracy in Indonesia as
shown by the increasing number of political parties and media
organizations, and regional autonomy, etc. Yet, the process of
democracy has been challenged by undemocratic practices.
Violence, terrorism, gangsterism,and weak law enforcement, have
hampered the country's struggle towards democracy. Freedom of
expression is still being repressed.

The protection of customers also remain poor. Customers in
many cases are even powerless while reform to strengthen business
is uncertain. This will be a handicap not only for the betterment
of politics and economics, but also for that of the business
society.

Uncertain reform in business is also reflected by continuous
restlessness among employees. Decision making is often
centralized and communication is top-down in nature. These styles
do not fit in today's companies, which now must have strong
customer or market orientation, though most family-owned
companies are in favor of authoritarian leadership.

Under such a leadership, a "just to please the boss" mentality
could spread among employees, rather than the mentality to
prioritize customers. The company's control mechanism with a top-
down approach would be ineffective. Yet many such companies are
still found despite their supposedly modern management.

We just wish that our business leaders could learn two things
much better than the previous conglomerates did. Firstly, past
experience shows that the strong reliance of our conglomerates on
power and close connection with bureaucrats has endangered the
country's business and economy. Business competitiveness is less
assured in an undemocratic society, given the lack of
transparency and accountability.

Good corporate governance in global firms, which aims for
transparency and accountability, is part of efforts to improve
efficiency and competitiveness. We are witnessing global
companies racing for good corporate governance, after the
unpopular scandals of big corporations, like Enron, Arthur
Andersen, WorldCom, Tyco in the U.S.; SK Corp in South Korea;
Tokyo Electric Power in Japan, Royal Ahold, Marconi, and Vivendi
Universal in Europe. It is beyond sensibility that not many
Indonesian firms seem to have not been incited by the global
business movements in the tightening worldwide competition.

Global forces have in many ways made economies and businesses
improve the quality of management and services. Market forces
have been playing prominent roles in business success. Large
companies are subject to international conventions and
regulations. Therefore, to a certain extent, worldwide
communities have contributed to the betterment of business and
the creation of democracy in business.

The global economy basically restrains bureaucrats from
intervening in business. It's ironic that the government, instead
of the private sector, has been the one taking the most
initiatives to integrate the country's economy with the global
economy.

Free trade and the global economy should trigger reform among
Indonesian businesses. Foreign investment and trade basically
demands improved transparency and accountability in local
business. In companies, as BusinessWeek reported in May this
year, it is those foreign shareholders who are among the loudest
crying for corporate reform."

Business leaders should reconsider the implementation of
industrial democracy within their companies, as they dream of a
democratic society. Instability could occur in an undemocratic
society, threatening all business activities. It's much better
for companies to take anticipatory actions instead of being
pressed by foreign investors or crippled due to the increasing
access of global companies within the country.

They should not ignore political aspirations, but it doesn't
mean that they should benefit from political access for their own
interest. The business-bureaucrat close connection has weakened
the country's economy and business. People at large do not
sympathize with any gesture of conglomerates to form patronage
ties with bureaucrats let alone have public service under their
control.

For democracy in business to succeed, not only firms are
obliged to empower their employees, but their employees should
have strong will for self-improvement. As Konosuke Matsushita in
his book As I See It states: " ... increase the understanding
that democracy requires each citizen to strive toward personal
growth and to respect the rights of other people."

The application of democracy at the company level lays a
strong foundation for business reform. This could lead companies
to have strong customer and market orientation with great care on
stakeholders' interests. But companies should have their own
rules and regulations, which would ensure the freedom of all
employees in expressing opinions, ideas, and aspirations within
their scope of work and responsibilities. As a consequence, the
management is tasked to empower employees for having new ideas,
innovation, improvement, and productivity. All this aims for
better competitiveness.