INDONESIAN BUSINESS CULTURE

Cultural Diversity
Hesty Oktariza | 014200900073

Different fields, different grasshoppers; different seas, different fish Indonesian Proverb -

Significance of Indonesia in the World

y World s 4th most populous country (229,965

million people in 2009) y World s largest archipelago (more than 13,667 islands, consist of more than 300 ethnic) y World s largest moeslem population, but Islam is not the only religion

Introduction to Indonesia
y Indonesia is a mixture of

Dutch, Malay, Chinese, Ind ian and Arabian heritage.

y Rich of natural resources:

oil & gas, minerals, forestry, agri culture and marine products including its stunning natural scenery.

Key Concept on Indonesia Business Culture

y Hierarchy y Face y Time y Group Thinking
 Hierarchy plays a great role in Indonesian culture  Respect is shown to those with higher status, power, position, and age  Superiors are often called "bapak" or "ibu to show respects.

Key Concept on Indonesia Business Culture

y Hierarchy y Face y Time y Group Thinking
The concept of face is about avoiding the cause of shame. As a result, people are very careful with the way they interact and speak in order to maintain group harmony. Indonesian is an indirect society in communication style.

Key Concept on Indonesia Business Culture

y Hierarchy y Face y Time y Group Thinking

 In Indonesia, Time is not Money  Group harmony is more important  Indonesian doesn t like rush in business, they take longer time to make consideration and decision

Key Concept on Indonesia Business Culture

y Hierarchy y Face y Time y Group Thinking

Indonesia is a collectivist society Group harmony get higher importance than individual greed People will define themselves according to their ethnic group, family and place of birth

Cultural Dimension of Indonesia

y Power Distance Index (PDI)
100 80 60 40 20 0
95 68 68 54 40 35 38 13 77 77 78 80

PDI

 Large gaps between organizational structure in organization Individuals are careful about expressing their opinion to superiors Show proper respect to their boss Superior issue directives and expect subordinates to speak only when allowed and unpleasantly surprised when subordinates freely air their opinions.

Cultural Dimension of Indonesia

y Uncertainty Avoidance Index
100 80 60 40 20 0
92 90 86 81 65 60 54 53 48 46

40 29

Society with low Uncertainty Avoidance Index tend to place greater emphasis on stability rather than innovation and change in order to reduce or minimize risk

UAI

Cultural Dimension of Indonesia

y Collectivism
100 80 60 40 20 0
91 80 71 67 54 50 48 46 25 20 20 14

Opinions are determined by group members People see themselves first as part of the group and are concern with the welfare of group

Collectivism

Doing Business in Indonesia

 Be polite  Respect  Make eye contact and friendly smile  Use pleasant voice  Be genial  Avoid confrontation and disharmony  Be patience with tardiness  Build interpersonal relationship  Low profile  Understand status differences Address Indonesia colleague with proper proffesional titles

Business Ethics in Indonesia

y y y y y y y y y y

General Etiquette Introduction Greeting Respect on Values and Believes Appearance Negotiation Business Meeting Etiquette Dining Etiquette Gift Giving Etiquette Women in Business

Recommendation : Doing Business in Indonesia

y http://il.youtube.com/watch?v=3z8Y3LknZFo

Conclusion
 Doing business in Indonesia need understanding

of its hierarchy and bureaucracies  Indonesia is a collectivist, risk avoider and high power distance country  Investing in personal relationship is critical to success in working with Indonesian  Communication in Indonesia work by indirect manner.  Indonesians do not rush in making business