Surabaya Zoo: a social enterprise on the
cross road
Aluisius Hery Pratono, Mario Antonio Lopez and Ruswiati Surya Saputra
Aluisius Hery Pratono is a
Lecturer at the University
of Surabaya, Surabaya,
Indonesia.
Mario Antonio Lopez is a
Professor at the Asian
Institute of Management,
Makati, Philippines.
Ruswiati Surya Saputra is
an Educator at the
University Utara Malaysia,
Sintok, Malaysia.
Disclaimer. This case is written
solely for educational
purposes and is not intended
to represent successful or
unsuccessful managerial
decision making. The author’s
may have disguised names;
financial and other
recognizable information to
protect confidentiality.
DOI 10.1108/EEMCS-09-2013-0183
Mr Samson, a senior official at Surabaya City Government, pondered over the proposal in
his hands. Along with his authority for overseeing the budget of the local government, he
was fully aware that he had to make an emergency decision about the proposed budget of
USD150 million (Antara, 2013).
He could not continue to ignore the situation of the animals, given his deeply rooted ethical
convictions. Due to an unresolved management conflict, the zoo apparently failed to reach
expectations. A number of animals, as well as workers, suffered because of a longstanding
management conflict. This called for a quick response from the local authority with which
Mr Samson was involved. He would have to decide whether the zoo would close or
continue operating.
Typically the promotion of animal rights is not prioritized by law enforcers in emerging
economies (Dallas, 2013). The effort to provide more resources for animal welfare is not a
priority for local public policymakers when so many people still live on the poverty line.
However, this zoo disaster had attracted international attention. For example, Tierpark
Berlin, Germany, and CNN came to Surabaya Zoo on March 24, 2012 (Suara Surabaya,
2012). They highlighted the problems of too many animals in their cages and the poor
quality of the animals’ food.
Is a zoo a social enterprise?
Zoos or zoological parks are social enterprise models with mixed goals. They do good
things, such as raising money for conservation, and promote well-being via education and
recreation. Besides intervention for conservation purposes, sheltering and providing care
to endangered animals, a zoo’s management is also challenged to provide a decent quality
of life to its animals (Fraser, 2012). For wild animals, life in a zoo is unnatural, so as most
conservation programs can only fail to provide a natural mode of life to their animals, they
will suffer, to some extent, in the effort to prevent their species from becoming extinct
(Schnitzler et al., 2008, Shani and Pizam, 2010). One of the reasons refers to the economic
unfeasibility of zoos (Kikuchi, 2012).
In 2005, the Millennium Ecosystem Assessment (MEA) offered the best method of global
ecosystem assessment to promote business ethics in conservation. According to MEA,
business ethics in conservation constitutes three elements. First, the principle of animal
welfare refers to animal-centric ethics, such as their physical health, ability to engage in
natural behavior, suffering and stress (Vanhonacker et al., 2010). Keeping a wild animal in
a zoo causes the animal to lead a less pleasant life that it would enjoy outside a zoo. The
second principle concerns education by which a contribution to the welfare of the
environment as a whole is made where zoos provide experiences to students who develop
their critical thinking. Yasuda (2013) argued that a zoo is merely about humanity asserting
VOL. 4 NO. 2 2014, pp. 1-13, © Emerald Group Publishing Limited, ISSN 2045-0621 EMERALD EMERGING MARKETS CASE STUDIES PAGE 1
 the dominant role of culture over nature. From this perspective, zoos are theaters of
conflicts between entertainment and educational values.
Turning to Surabaya Zoo, the organization defined its aims as being a place for recreation,
education, research and conservation. In its favor, it played a pivotal role in offering green
space in Surabaya City, and the zoo had been claimed to hold the most diverse collection
of animals of any zoo in Southeast Asia. From endangered Sumatran tigers and orangutans
to Komodo dragons and a broad array of birds, Surabaya’s magnificent menagerie would
indeed have been something to behold, if the animals were not living in squalor.
The Surabaya Zoo was open to the public. Visitors were allowed to visit the wildlife parks
and zoos to view the animals, which were exhibited in captivity. In addition to being a tourist
attraction and recreational facility, regulation mandated that zoos should offer educational
programs and educational outreach activities, conservation study and also engage in
captive breeding programs. In Indonesia, the role of zoos in the conservation of biodiversity
had become a legal obligation under Regulation of the Indonesian Forest Ministry P53/
Menhut II/2006. That regulation required any zoos in the country to play their role as animal
“arks” with an explicit conservation purpose.
The 15-ha zoo had strong financial performance before 2010. The Government of the City
of Surabaya owned the land, which had an estimated value of Rp565 billion in 2011. The
animals belonged to the community. The zoo’s other assets were 35 office buildings with
facilities and 66 cages, valued at Rp10 billion (Tempo, 2013). The organization’s
performance in the next few years under new managers was poor. In 2010, the zoo’s
income dropped by ⫺5.7 per cent, while a couple of years before, the income growth was
between 12 and 23 per cent. The return on assets was around 3 per cent, which was much
lower than the relevant interest rate of 5 per cent. With entry fees of $2 per person and
animal breeding running rampant, the zoo did not have anywhere near enough money to
care for its growing number of creatures. In 2011, the organization did not provide financial
performance figures (see the Table I).
As a legacy for Surabaya City, Surabaya Zoo was considered to be a priceless asset. It was
established on August 31, 1916, when Surabaya city was under the Dutch Colonial
Government. When Mr Komer, a Dutch exotic animal collector from Surabaya, aimed to
preserve his animal collection, a railway corporation (N.V. Oost-Java
Stoomtram-Maatschappij) provided 30,500 m2 of land located at the heart of Surabaya city
for its conservation. In 1922, the zoo was just about to shut down following a financial crisis
suffered by the railway corporation due to the Great Depression and the collapse of sugar
exports. Finally, the corporation closed down in 1924 (Dick, 2002). At that point, Mayor
Dijkerman provided financial support and took over ownership of the railway corporation’s
land. Under the new management, W.A. Hompes became the zoo’s chief. After the
independence wars of the 1940s, the new regime nationalized all foreign companies,
including the zoo. Thereafter, Captain Stany Subakir managed the zoo for decades. He was
the military aide to General Basuki Rachmat (Djamaluddin, 2008).

The conflict of interest

Surabaya Zoo has become a controversial subject for many reasons, which include the
poor quality of life of the animals that they exhibit, and the fundamental question of whether
they should be exhibiting captive animals at all. Despite the fact that Surabaya Zoo was
quite popular with locals and visitors due to its collection of ⬎4,000 wild animals, the zoo
was still notorious for the poor treatment of its inhabitants. The 15-ha zoo was home to 4,025
animals, which was regarded as being over its capacity. Forty-four animals at the zoo
reportedly suffered from chronic diseases. Allegations of poor treatment, prompted by a
series of deaths, had dogged the zoo.
In 2009, management conflict began. There was a general meeting concerning
organizational restructuring which was attended by animal owners, experts and staff. A

PAGE 2 EMERALD EMERGING MARKETS CASE STUDIES VOL. 4 NO. 2 2014

new leader took over management from his predecessor of ⬎25 years, but this takeover of
the zoos management had been contested in court.
In 2010, an ad hoc management team from Indonesia’s Ministry of Forestry took over the
zoo following a series of animal deaths, including those of a Sumatran tiger, an African lion,
a wallaby, a Komodo dragon, a young babirusa, a Bawean deer, a crocodile and several
exotic birds (Kompas, 2013). However, the terrible story had not yet come to an end.
Between 2010 and 2011, 250 animals died. Among them, mountain goats died of digestive
disorders. Apparently, after surgery, a plastic bag was found in the stomach of one. At the
death of a crocodile, 25 stones were discovered in its stomach (The Jakarta Globe, 2013).
Approximately 15 animals at the zoo die every month – a figure that has actually decreased
from two years ago – having suffered from preventable diseases, hunger, lack of exercise
and overcrowding.
In 2012, 130 animals died. In June 2013, two orangutans died. Normally, orangutans can
live 50 or 60 years (VOA Indonesia, 2013). The zoo’s Betty was 15 years old and Nanik was
just 12.
Here is list of deceased animals:
 a male muntjac deer died aged one year due to the cold after heavy rain (November
2011);
 a Komodo dragon died (November 2011);
 Sumatran tigers died of hepatitis (2011);
 a Goteng boar died; signs of cyanide poisoning were found in its stomach, heart and
lungs (February 2012);
 a Canadian black bear died after suffering from a severe skin disorder and being forced
to reside in a specialized clinic and quarantine cage (March 2012);
 Leo, a male banteng (Bos javanicus), died of a broken leg after being stuck in the gutter
edge of the cage (March 13, 2012);
 a giraffe named Kliwon died after suffering tuberculosis and the destruction of its
digestive organs; 20 kg of plastic was found in his stomach, its body overrun with worms
(March 2012);
 three species of birds (200 birds) were noted in a cage measuring 15 ⫻ 20 m, namely,
Australian pelicans, great white egrets and black cormorant (March 2012); and
 two orangutans died due to inflammation of the lung (October 2013).

The poor treatment of animals at Surabaya Zoo caused international consternation. Some
Australian tour operators threatened to boycott trips to East Java. In their email, they said
that they had intended to visit Surabaya with around 20 others, but canceled their plans
following media reports about poor conditions at the zoo. The local council also received
similar messages from Japan, The Netherlands, South Korea and the UK asking if the
Indonesian Government would take action to save the animals at the zoo (Centroone,
2012).
During the crisis, the Forestry Minister appointed an ad hoc management team from Taman
Safari Indonesia as staff had proposed to the Surabaya City Government. At first, the ad
hoc management team focused on animal conservation. The new management also
handled human resource management and converted 30 staff from full-time workers to
contracted workers and then fired them. For example, Agus, who had been a lion-keeper
for over ten years, was told to become a part-time fish-keeper. He refused. While the
disputes continued, the Forest Ministry decided to withdraw the zoo’s license.

VOL. 4 NO. 2 2014 EMERALD EMERGING MARKETS CASE STUDIES PAGE 3

 In 2011, there were some potential investors who proposed to take over management of the
zoo, which included the Surabaya City Government, a women’s group, and a private
company with a corporate social responsibility (CSR) program. However, East Java’s
Governor and the Forest Ministry provided a green light to another private investor to
convert the zoo into a hotel business. Eventually, one of the investors withdrew its proposal
because the land’s status was regarded as an urban space (Vivalog, 2013).
Hence, Surabaya City Government and the Ministry of Forestry argued about how to handle
the zoo’s deteriorating conditions. Surabaya’s Mayor rejected the Ministry’s plan and
argued that the Forest Ministry regulation SK.281/Menhut-IV/2011 urged the ad hoc
management team to find potential investors. The Surabaya Government refused to be
represented on the ad hoc management team.
A top manager of forest protection and nature conservation at the Forestry Ministry pointed
out:
We respect their decision to keep the zoo open, but this would cost approximately $5.5 million
to fund the zoo and improve the animals’ living conditions. If they don’t want the animals, there
are plenty of other zoos waiting in line, including in Jakarta and Singapore.

The conflict also infected public discourse. For example, Jawa Post and Surya, two main
newspapers in the city, debated the zoo’s future via headlines. Jawa Post tended to support
the local government, while Surya preferred the Ministry of Forestry (Rohmah, 2013).

The proposal
In 2012, Surabaya City Government put forward a plan for the zoo. A new management
team was prepared after the former management team was incapacitated by the unending
conflict. The government proposed to give Rp142 billion (around USD150 million) to
develop the zoo.
The regulation also required the zoo to provide qualified leaders and staff who would act
on behalf of wildlife and nature and influence others to do so. The position of a zoology
officer requires diverse skills and knowledge. Other necessary staff included a veterinarian,
biologist or conservationist, curators, nurses and security. A conservationist works with
landowners and governments to protect natural resources including soil and water. They
help find ways to utilize land without harming the environment.
After a series of redundancies, the human resources staff comprised just a small number
of novices. In 2012, 30 staff members went on strike after their work was terminated. The
zoo hired 74 per cent part-time staff, mostly uneducated beyond junior high school levels
(Vivalog, 2013). Only 20 per cent of the staff had higher educational backgrounds, while
qualified workers comprised only 12 per cent of the total workforce.
There were a number of inexperienced workers due to the high staff turnover rate. Younger
employees routinely complained about disenchantment with their employer due to the
demands placed on them by managers who might have confidence in their abilities but
lacked the time or skills to help them succeed. Faced with limited opportunities, frustration
and afraid that they would fail, many of these younger employees planned to move on and
looked for more supportive business environments. (This factor might be generally found in
the society, as the average 30-44 year old has had up to ten different positions.)
Under the new management, the number of staff would be 144. The Board of Directors
would have a responsibility to protect the shareholders’ assets and ensure that they
received a decent return on their investments. A Board of Commission would act as a
supervisory body. The 40 zookeepers would be expected to handle 2,500 animals. The
proposed salary structure evidenced a huge gap between the top management and other
staff. A director’s expected income was to be around Rp24 million (USD2,500) per month,
while the salary of a veterinarian and paramedic were just about Rp4 million (USD400) and

PAGE 4 EMERALD EMERGING MARKETS CASE STUDIES VOL. 4 NO. 2 2014

 Rp2.2 million (USD250) per month, respectively. The new director could expect a
representation income, which is 75 per cent of his income.
Mr Samson did not know what he should do, especially about how he was supposed to
treat the animals and workers in the organization. He knew that Surubaya’s citizens loved
their zoo. The USD150 million proposed was enough to save the zoo, but Mr Samson also
had to weigh the ethics of conservation as part of his decision to grant approval for the
proposed budget.

Conclusion
There is a nagging question for zoos of how to balance profit for investors with costly
conservation goals. The case indicates that public policy intervention is not free from value
judgments and interests. The conflict of interest between national and city governments
indicates that policymaking is driven by self-interest. Lack of experience in leadership
transition is a common issue in emerging economies and brings about the huge risk of
organizational failure. The unnecessary intervention from the higher level of government
causes further risk, namely, government failure. This policy failed to build networks at all
level of workers to understand the problem with daily work.
Keywords:
Public policy, Decisions to continue operations or to close down each have their consequences. To
Firm performance, continue, this zoo operation needed a new vision and a new model, which could be
Social enterprise, different from the social enterprise model. Closing down the organization would require the
Conservation ethics deployment of resources to save the animals and compensate the workers.

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About the authors

Aluisius Hery Pratono is affiliated with the Faculty of Business and Economics, the
University of Surabaya (Ubaya), Indonesia. He is now a PhD student at the University Utara
Malaysia with research interest in entrepreneurship theory and firm performance. Aluisius
Hery Pratono is the corresponding author and can be contacted at: hpratono@yahoo.com
Professor Mario Antonio Lopez is on the core faculty of the Washington SyCip Graduate
School of Business (WSGSB), Asian Institute of Management, Philippines. He holds a
Masters in Business Management from the Asian Institute of Management and a Masters in
Public Administration from the Harvard University Kennedy School of Government. He
completed his doctoral studies the De La Salle University.

Professor Ruswiati Surya Saputra is a faculty member of Othman Yeop Abdullah Graduate
School of Business, University Utara Malaysia. She holds a Doctoraate in Economics and
Management Study from Airlangga University with research interest in strategic
management, corporate social responsibility, marketing management and human resource
development.

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