Indonesia must step up professionalism

Indonesia must step up professionalism

THERE will be no outright givens, no certainties of investment
and economic prosperity, in the fiercely competitive business
times looming ahead, management experts warn.

Staggering technological advancements have made the global
village a reality, traversing borders and bringing the latest
developments into even the most remote areas in the world.

The dynamics of conducting business have changed inexorably.
The era ahead will call for solid, effective management for
Indonesian businesses to steer themselves on the course of
greater professionalism, say Djunaedi Hadisumarto and John
Prasetio, both members of the board of judges for Indonesia for
this year's Asian Management Awards, which were presented last
night at the Jakarta Hilton International Hotel.

Other members of the board of judges for the awards from
Indonesia include Rachmat Saleh, president commissioner of Bank
Muamalat and part of the Governing Board of the Asian Management
Awards, and H. Surasa of the Indonesian representative office of
the Asian Institute of Management.

Djunaedi and Prasetio caution that Indonesian businesses will
no longer be able to rely on their traditional attractions of
vast resources and a cheap labor force because the race for
foreign investment is now more heated than ever.

The opening up of China over the past decade, its remarkable
industrial and economic growth, as well as the forthcoming boost
to its might with the return of Hong Kong to its domain in 1997,
have slashed the number of investment opportunities for other
countries in Asia.

The belated acceptance of Vietnam back into the fold of
business and politics will pose a further threat to economic
growth in neighboring countries.

Globalization

Djunaedi, assistant for Economic Affairs at the Office of the
Coordinating Minister for Economy, Finance and Development
Supervision, and Prasetio concur that a deliberate, concerted
approach to changes in management practices in Indonesia is
needed -- and fast.

Prasetio, managing director of the accounting firm of
Prasetio, Utomo and Co., compares globalization to a virus which
has already infected Indonesia, but many companies are lagging
behind in rising to its challenges.

His diagnosis for meeting the onslaught of globalization is
the push towards professionalism in all aspects of running a
company.

"Indonesian companies must really go with professionalism in a
most aggressive way," Prasetio says. "Many Indonesian companies
are trying to take advantage of global trends, which is great.
But the traditional mindset of conducting business in Indonesia
must change so that they can operate under global norms."

Part and parcel of developing professionalism is the need to
identify the core business sector of the company and devise the
appropriate strategy to achieve goals, Prasetio says.

He describes some managers as employing a "hit-or-miss
approach to business...they go from one business to another
without everdeveloping a really successful strategy in any one."

He advises that managers must put concerns on huge profits on
hold for the sake of developing professional practices which will
be beneficial in the long run.

"Some companies are too bottom-line oriented. Managers who are
overly profit oriented will have problems. But those with a
mission of what they want to accomplish know to how survive
through developing their core business."

Recent financial scandals in the banking sector have further
highlighted the importance of professionalism, Djunaedi adds.

"There is a real need for professional attitudes among bank
employees. People can learn from the recent cases and see them as
important lessons in implementing professional banking
practices."

Family business

Both men pointed to the traditional family-dominated structure
of Indonesian business, in which the reins of power are handed
over from the patriarch to his scion, with family members
wielding power in diverse aspects of the company.

In many cases this fosters the development of a closed, rigid
management system where the top administrator feels responsible
for all aspects of the running of the business and wary of
delegating power to all except his family circle, Djunaedi
states.

"If we define professionalism we are actually talking about a
greater reliance on professional skills. Attitudes must change
toward this goal, instead of placing the interests of the family
first."

The prevalence of nepotism within the management structure,
which Djunaedi attributes to traditions within Indonesian and
Asian societies, will hopefully diminish as people realize the
limits they place on expansion.

"The challenge will then be to develop professional management
practices and training of people to be more professional," he
says.

Not all companies where younger family members take over from
their relatives remain entrenched in the old guard style of
management, Prasetio says.

But he praised the willingness to adapt to the demands of a
changing world at Bank Bali.

In 1991, Bank Bali was recognized for outstanding Information
Technology; in 1992 for Financial Management; and this year, it
received double honors in the categories of People Development
and Information Technology.

When the bank's founder and now chairman, Djaja Ramli, named
his son, Rudy Ramli, to the post of president in mid 1992, the
move marked a gradual transition to a younger generation of
managers, not the mere continuation of established ways, Prasetio
says.

"Rudy Ramli was educated in the U.S. so his management view is
one more suited to these changing times," Prasetio says. "He has
shown himself to have his individual vision of management for
today."

Ramli has brought in a host of new managers and his leadership
is working well. In the past few years, Bank Bali has weathered
difficult economic times to emerge as one of the strongest and
most respected banks in Indonesia and Asia.

Information

An end to the aversion towards divulging information and
discussing business practices will spur greater economic
development for businesses in general, both men agree.

Fears of losing advantage to competitors and making them privy
to company secrets have led many companies to keep tight-lipped
on their formulas for success, Prasetio says.

"Information is still expensive in Indonesia. In America, for
instance, one can open up a copy of a business magazine and find
out how a company became successful and adapt their example to
one's own case; the information is readily available."

Prasetio qualifies this by stating that globalization and the
presence of younger managers with more cosmopolitan experience in
the business world will force change.

"Here, we are still very closed but that is changing. The
older generation of managers is fading away and that will bring
in new leadership. Younger managers are more willing to open up."

Both Prasetio and Djunaedi were in agreement that greater
distribution of information should be accompanied by the
perception that competitiveness within the workplace is not
something to be disdained or viewed as a threat.

This will require a shift in values, Djunaedi concedes,
because competitiveness runs against the grain in the communal,
close-knit society of Indonesia which covets the concept of
rukun, the maintenance of harmony in all relationships. To pit
oneself against others in achievement risks upsetting the
harmonious balance.

Djunaedi relates his own experience as a university dean when
he moved to implement an honors program.

"I received a lot of criticism from my colleagues, who said I
was trying to treat people differently and creating distinctions
between them. For me it was the same as having performance
scholarships for students who had showed their potential, in
contrast to just awarding scholarships based on need."

Prasetio says a positive view of competitiveness is sure to
develop among the younger generation of business people.

"I'm speaking as an older person here when I say that we are
brought up to be tolerant. We learn that it is very important to
be careful to avoid jealousy, trying always to refrain from
creating envy among other people from our actions. But this is
changing. Young people today are more accepting of taking a
higher profile role than their predecessors were.

The Asian Management Awards is one means to opening up
Indonesian business to development and putting it on the
competitive track with its counterparts in other Asian countries,
Djunaedi believes.

"The companies are willing to disclose their data and this is
very beneficial," he says. "More openness on issues and problems
these companies have overcome will help in the growth of the
science of management."

Window: ...greater distribution of information should be accompanied
by the perception that competitiveness within the workplace is not
something to be disdained or viewed as a threat. This will
require a shift in values, because competitiveness runs against
the grain in the communal, close-knit society of Indonesia...