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Doing business in Indonesia: Five cultural essentials

Doing business in Indonesia: Five cultural essentials

Ulun Danu. Bali

We say “When in Rome, do as the Romans do”, but the Indonesians say “Hold up the sky of the land where you walk”.  More than just fitting in, the Indonesian saying suggests that you should actively contribute to maintaining order by respecting local customs.

Many of us have heard that we should be aware that Indonesians do not like to lose face, but what does this actually mean in practical terms?

Here are five ways to avoid the sky falling down on your Indonesian business venture.

 

Respect power dynamics

Indonesians value hierarchy, power and status. A failure to show an Indonesian the expected level of respect can be off putting.  Bahasa Indonesia uses a myriad of personal pronouns to establish the power dynamic between two people, and Indonesians will make small talk to establish where each sits on the hierarchical scale. Using formal titles, waiting for a senior person to be seated, eat or drink before you do, and dressing formally goes a long way in Indonesia.

Foreigners will not be expected to understand the intricacies of Indonesian power dynamics, but will need to demonstrate a certain level of respect to senior people, particularly in front of their peers.  Rather than demonstrating that someone senior is factually wrong or have made a poor judgement call, Indonesians will often suggest that there may be other issues to consider, allowing them to change their decision and keep face.

 

Don’t show impatience as anger

You will rarely hear the expression “time is money” in Indonesia.  Even simple tasks can take longer than expected, particularly in Jakarta. How well you deal with this will influence your relationships.  

Given the power dynamics in Indonesia, bosses will routinely summon their staff at little notice, regardless of existing commitments.  The cascading effect can mean meetings are delayed, along with bureaucracy, traffic, extreme weather and unreliable communications.

Emotional outbursts by frustrated foreigners can be interpreted in two ways by Indonesians, both of which are negative.  Firstly, showing strong emotion in public is considered embarrassing, makes everyone feel uncomfortable, and portrays you as flighty or weak. Secondly, by demonstrating that something did not work in Indonesia, you are inadvertently pointing the finger at someone’s failure and making them lose face.

Be patient, keep your schedule flexible, don’t try to cram too much into your day, and most importantly, keep your cool.

 Temple in Java

Value relationships over results

The one certainty of doing business in Indonesia is that you will need friends to help you at some stage. The value Indonesians place on relationships cannot be overstated. Thus having wide business networks can make all the difference.  Often the success of your business is directly related to the strength to your relationships.

Fighting for every small thing will not only cost time and money, but can be counter-productive. Make strategic judgement calls on what you can concede. It pays to focus on the long-term and not let comparatively insignificant issues jeopardise a relationship.

 

Avoid conflict

Indonesians will go to great lengths to avoid conflict and maintain harmony in their lives, with open conflict seen as a failing that makes everyone lose face.  In business, the balance between preserving harmony and getting things done can be tricky, even for Indonesians.  

Australians’ business practices, such as directness and calling things as they are, may be interpreted as confrontational in Indonesia.  Keep in mind the concept of face when potential conflicts arise, and look for ways to leave both parties’ dignity intact.  An embarrassed smile from your Indonesian counterpart is usually a signal that you have overstepped the mark.

 

Don’t expect certainty or concrete outcomes every time

Australians generally expect certainty when finishing a meeting, or when entering into a contract.  In contrast, there is higher level of ambiguity when doing business in Indonesia.  

While Australians often attend a meeting with concrete objectives, the primary purpose of the Indonesians at the same meeting may be to get to know you.  Pushing for a decision in this situation may negatively impact on your relationship, which is the key to successful business in Indonesia.

 

To find out more about Dearin & Associates’ cross-cultural consulting services, contact us on info@dearinassociates.com or +612 8076  4660.

 

About Barnaby Caddy

Barnaby has worked for fifteen years on international affairs, with particular expertise in Indonesian issues.

As a fluent speaker of Indonesian language, and having worked in Indonesia and on Indonesia-based issues for many years, Barnaby has been able to share a deep working knowledge of Indonesia’s culture. Barnaby’s cross-cultural experience has also been developed through living and working in diverse cultures across South East Asia, Liberia, and North Korea where he recently worked as a consultant to the United Nations.

Most recently Barnaby has provided consultancy advice and training on international development issues. This includes providing expertise on the complexities of managing overseas aid projects, particularly the softer skills needed for successful business operations in difficult foreign environments.

2 Comments

  1. Barnaby,

    You forgot to mention that Indonesians lack surnames haha … is not it unbelievable?

    Best from Argentina!

  2. Don’t forget the difficult banking regulations that limit and discourage money leaving the country. Patience with that has been the biggest hurdle to overcome . . . the other stuff is relatively easy to deal with, especially if one has significant experience working in a variety of places around the world.

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