RI firms need revamp to survive free market

RI firms need revamp to survive free market

JAKARTA (JP): Indonesian companies will need to restructure
themselves if they want to survive in the upcoming free market
era, a management consultant says.

David Coleman of the American Management Association (AMA)
said in a briefing with AMA members yesterday that external
pressures, including competition from countries with lower wage
policies, will give Indonesian companies no choice but to carry
out restructuring strategies to increase their efficiency.

Yesterday's briefing was organized jointly by the AMA and the
Jakarta-based Institute for Management Education and Development
(LPPM).

Restructuring, according to several major American firms, is a
market-driven process, helping companies to compete more
effectively and react more quickly to market changes so they can
maintain their growth targets.

While restructuring is often costly and can result in
"painful" experiences for a company -- such as when it has to
trim down its workforce and reorganize or break up its management
-- it can improve the performance of a company, Coleman said. Its
effects include leaner, de-layered structures within a firm and
the introduction of new cultures and technologies, he added.

Commenting on Indonesia in particular, Coleman said that
corporate restructuring was taking place very slowly.

"But external pressures will speed up the downsizing process,"
he said.

Coleman said Indonesian companies should conduct restructuring
strategies in an "Indonesian way" to avoid the "painful mistakes"
that many Western companies have made.

"Indonesian firms should use a systematic approach which
applies to the local culture. Restructuring should be done in a
sensitive and considerate way," he said.

Chairman of the LPPM Foundation Frans Seda said at yesterday's
seminar that internal pressures, both from within a company and
within the country, may also force a company to undertake
restructuring strategies.

National companies currently engaged in unethical practices
such as collusion and corruption will gradually have to change to
face the internal and external pressures, Frans said.

LPPM President Anugerah Pekerti pointed out that many state-
owned firms with poor performances in the past had to undergo
major restructuring when they decided to go public.

"It becomes a requirement... because restructuring can lead to
increased efficiency, transparency and higher public
accountability," he said.

During the seminar, a memorandum of understanding was signed
between AMA and LPPM to form a partnership that will organize a
number of seminars, training programs and conferences.

The deal was signed by the president of AMA International for
the Asia-Pacific Region, Peter M. Absalom, on behalf of AMA, and
Anugerah Pekerti on behalf of LPPM. (pwn)