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...