Cultural differences a sacred cow?

By Donna K. Woodward

MEDAN (JP): Last Dec. 30 The Jakarta Post carried a report from Coordinating Minister for the Economy, Finance and Industry Kwik Kian Gie about the state-run electricity firm's loss of Rp 5 trillion because of poor management. In an ironic juxtaposition, in the same issue there was an article by consultant James O'Hara discussing Indonesian companies' fear of introducing management change.

If foreign consultants working in Indonesia share any experience, it is probably that of having one's recommendations ignored if not expressly rejected by clients. As noted by O'Hara, recommended changes are sometimes avoided because business executives believe that change is an admission of inadequacy and tantamount to a loss of face.

Sometimes changes are postponed out of complacency; there is no perceived need for change so long as business results are considered satisfactory.

There is a third reason sometimes proffered for rejecting the changes recommended by foreign consultants. Some business executives contend that what works in other countries simply will not work in Indonesia because of incompatible cultural values.

Experts try to articulate what these cultural values and differences are. (The term "culture" itself presents a problem of definition, especially in Indonesia, where culture is actually a potpourri of cultures.)

Cultural variety is seductive and exhilarating. But as we also see, culture-based variations in belief and behavior can become barriers to understanding and cooperation. The management changes which most often meet resistance from managers are those relating to human resource management: to performance standards and workplace values.

Because of their culture, Indonesians cannot be expected to report to work on time, to complete assignments according to instructions, to be self-reliant and use initiative to solve problems, to work industriously, to be truthful about what something costs, to be trustworthy about financial responsibility, to meet obligations to an employer if there is a competing family obligation.

These stereotypical opinions are commonly offered as a rationale for not entrusting employees with more responsibility and not improving their salaries, and for permitting unacceptable work habits. And it is not necessarily foreign managers who say these things; Indonesian managers make the same comments.

They turn the notion of cultural differences into a sacred cow, using it to rationalize conduct that would not otherwise be acceptable. Some Indonesian employees do embody such shortcomings, as do their counterparts in New York or Frankfurt or Melbourne.

Other Indonesian workers defy these stereotypes. No, the problem is not one of immutable cultural differences. Nor is the problem the poor quality of human resources in Indonesia. The biggest handicap of Indonesian workers is the antiquated human resource management styles favored by both Indonesian and expatriate-managed companies.

In a cheap labor environment, companies find it easier to live with the status quo of poor performance and low productivity than to introduce change.

Managers decline to introduce modern management principles and employee incentives, and then in a fallacy of circular reasoning cite continuing poor worker productivity to justify a refusal to implement modern human resource management methods.

Employers tolerate employees' misuse of work hours, excessive absenteeism, petty corruption and misappropriation of company property and other costly, profit-reducing practices; yet wages are kept discouragingly low.

Counterproductive labor laws protect workers excessively from termination for poor performance, but sanction substandard wage rates. Qualified employees are denied employment because of their religion or ethnicity, while the less qualified are often given preferred positions because they have the right backgrounds or connections.

Progressive human resource management is an idea whose time has not yet come to Indonesia. Instead of millennium-era employee relations we see a combination of benevolent despotism and outright repressiveness in the workplace, whether the workplace is a factory, a fish farm, a hospital or a bank. (Government offices are a little different, since to prevent mutiny the civil servants and troops are given leeway for the lucrative practice of corruption, collusion and nepotism, or KKN.)

Are cultural differences really so deep and insurmountable that modern management principles like accountability and mutual respect cannot be translated successfully into policies and practices in Indonesia?

Employers who have genuinely given modern management principles a try would say no. Outmoded human resource management, not culture, is the real enemy of Indonesian workers. Cultural differences are real, but if we should not disregard their significance neither should we sanctify them.

Let managers hold employees accountable for their performance. Let companies commit themselves to modern human resource management methods and KKN-free standards of employee conduct.

Let the government revise labor laws to mandate adequate wages and working conditions, but also permit appropriate discipline for non-performing employees. Let companies not fear change for the wrong reasons. Do not let cultural differences become an excuse for avoiding management reform. Do not demean Indonesian culture and handicap Indonesian workers from a misbegotten tolerance.

The writer, an attorney and former American diplomat at the U.S. Consulate General in Medan, is president director of PT Far Horizons, a management consultancy firm.