Understanding RI business culture

Understanding RI business culture

By Rob Goodfellow

WOLLONGONG, New South Wales, Australia (JP): Indonesia is
often criticized in the international press for what are loosely
identified as "corrupt practices". The truth is, as in most
things, "it takes two to tango", and Indonesia is no different
from any other country in that business, and business culture, is
essentially an exercise in quality improvement. Old ideas give
way for new as both Westerners and Indonesians look for better
ways of doing business together.

It is difficult to identify just what is Western business
culture. It is equally impossible to stereotype all "Asian
business" into one homogeneous cultural identity. Like the
nations of Europe, the countries of Asia, and for that matter the
islands of the Indonesia archipelago, have different histories,
cultures, languages and ways of doing business.

This notwithstanding, there are identifiable, general but
fundamental characteristics which when explained help put
Indonesian business into cultural perspective and context.

The key issue is that our two business communities approach
the pursuit of profit from diametrically opposite positions.
While one is preoccupied with objectives, outcomes, goals,
targets and ends, the other is equally preoccupied with
relationship building, process, strategy, networking and means.

This is an important distinction. The application of these
preoccupations determines the basic "complexion" of business
conduct.

By looking at experiences of several Western businesspeople in
Indonesia, I want to suggest that an appreciation of Indonesian
culture may provide a remedy to the negative perception that
Indonesian business is basically "corrupt". They have so far
weathered the Asian economic meltdown and have a long-term
commitment to Indonesia and her people.

Angelo and Mary (all names are pseudonyms) are consultants for
a major international company. They specialize in Indonesia and
have been involved in setting up numerous joint ventures since
1980. The company they represent has a firm policy of never
paying bribes, large or small. The question is, how does this
enterprise prosper in an environment which is believed to thrive
on "an imaginative show of respect and gratitude"?

Significantly, when Angelo and Mary set up their first joint
venture between their multinational enterprise and a major
Indonesian company, there were some problems.

According to Mary: "About 10 years ago we did a merchandise
audit and found that the consumerables for our new company were
four times greater than for a similar sized company in Europe or
the United States. The idea of doing an audit was first to
introduce our partners to the idea of accountability, and second
to give them a bit of a shock. We flew a team of accountants up
and they went through everything. We attracted some critical
attention immediately because all of the Indonesian directors had
shares in the consumerables network.

"It was obviously in their best interests to be very good
consumers. They all got a percentage off the top. There was 6
percent each for the directors, 4 percent for the manager and 2
percent for the foreman. It took a long time to sort it out, but
ultimately we sent a very strong message across to our partners
that this type of behavior was neither ethically tolerable nor,
more importantly, in the best interests of sound, steady
profitable business. Now this company is riding out the Asian
economic crisis and the message is getting through to the general
business community here."

Jack's company recently entered into a joint venture with a
large Indonesian firm to construct a coal-wash plant on one of
the country's outer islands. Jack was the on-site project
supervisor and company managing director for 11 months. This
company has done well, establishing and maintaining an annual
turnover of US$12 million. Jack is not at all comfortable with
the idea of paying bribes. He is, however, concerned about the
problem of what to do about it.

"Once a week I would take the company speedboat down river to
the major regional center and catch a plane to Jakarta," he said.
"I would usually slip a few rupiah to the man allocating seating.
One day he put his hand out for more; apparently 'there were no
seats left'. So I added another Rp 10,000. He wanted more again.

"I got really annoyed and said that not only would I take
another flight but that I would report him to a representative of
the airline company in Jakarta. I think this really frightened
him because I didn't see his hand come out again. In fact I don't
remember seeing him again at all. Maybe this is the best way to
handle the problem."

With the words of Angelo, the international business
consultant, I want to make a departure from just looking at
"corruption" and rather make the important point that, at least
as far as the following experiences are concerned, things are
definitely improving -- and this is because "relationship" is at
the heart of good business practice in Indonesia.

According to Angelo: "My Indonesian partner's wife called me
one Saturday morning at home in the States on her mobile phone.
She had just read about some new European fashion in a magazine
and asked me to buy a garment for her. I just assumed that it
must be a thing where I had to foot the bill and send it over as
a gift. On my next trip to Indonesia, and at this stage I was
virtually commuting, I was really surprised when she asked me
'how much do I owe you?' I said, 'It's a gift'. She replied, 'I
ordered it in good faith, and if you don't let me pay for it, I
will see it as an insult to our friendship'. Ten years ago
everyone seemed to have his or her hand out. Now it's uncommon."

I want to reinforce the essential message that Angelo is
conveying by drawing attention to the positive experiences of
others such as Lionel, who has been trading internationally in
silver jewelry, textiles and handicraft through Bali since the
early 1970s. He has a definite appreciation of relationship
building.

"I have invested half my life getting to know my Balinese
business partners," he said. "Naturally this took a lot of
perseverance and hard work. At first I went to a great deal of
trouble to not only get to know the head of a particular company
or producer community but also their families, friends and
associates. I also made a practice of discovering accounting and
billing mistakes in their favor. I did this regularly until I
found that I could be trusted. Now I can place large orders on
generous credit. Reputation is everything in Indonesian
business."

Jeff is a successful international furniture designer,
wholesaler and retailer. He moved his entire production team to
Indonesia five years ago. Like Lionel, Jeff has developed an
appreciation of Indonesian culture, and has subsequently used
this knowledge to advance his operations. And, like Lionel,
"corruption" is not an issue.

"I'm different from most of my competitors. I spend about 10
percent of my time in the office and the rest of the time on the
factory floor in shorts and sand shoes working with my Javanese
artisans. This has turned out to be very a creative and
productive practice. We have been able to develop a number of
innovative furniture design techniques involving not only wood
but also mediums such as stone, clay, tin and papier-mache.

"In this it is essential that my workers, about 150 or so,
know that I am delighted with their creativity. The pattern of
paternalism is still very strong. Because of this the figure of
Bapak or the 'father' of the company is absolutely important. And
I'm the big Bapak."

Wendy is a higher education consultant. She has played a major
role in negotiating joint-venture projects between Indonesian and
foreign business colleagues and universities. She speaks
Indonesian fluently and has been based in Jakarta for eight
years. Wendy clearly understands Indonesian business culture.

She maintains: "One thing that people don't understand is that
Indonesians have two faces, the public face and the private face.
In my experience the one-on-one relationship is very personal,
very private and very deep, and very important.

"Publicly it is different. It is shallow, all form and play,
like the Hindu-Javanese Wayang shadow puppet play. Everyone has a
role and is expected to act out that role. As a foreigner it is
important to take a lot of trouble to make your associate, who
might also be your close friend, look good. In an odd sort of a
way, by understating my position in a negotiating situation I
strengthen it. By putting myself down and my particular
Indonesian associate up, I look better, really the opposite to
the way it is done in a Western boardroom."

Angelo and Mary's consumable audit, Lionel's insistence on
establishing his good reputation, Jeff's appreciation of "Bapak-
ism" and Wendy's understanding of the difference between the form
and theater of Indonesian business culture are all significant
departures from the negative stereotypical view of Indonesia, or
what some incorrectly believe constitute negative "Asian values".

And, in the spirit of good change management, the
international media should encourage these positive reforms at
every opportunity instead of just focusing solely on negative
stereotypes.

The writer is a researcher and lecturer who specializes in
Indonesia.

Window A: It is difficult to identify just what is Western
business culture. It is equally impossible to stereotype all
"Asian business" into one homogeneous cultural identity.