Indonesian Business Structures

As often happens, the prevailing cultural norms of society are reflected in the business structure of the country.

Therefore, businesses tend to be extremely hierarchically organised with decision-making controlled at the top by either a small group of senior managers or by the senior family member.

A sense of hierarchy permeates the whole organisation with employees preferring the manager to make decisions and allocate tasks. Initiative, proactive thinking etc. are not really viewed as positives or even desirable as they could be seen as an implied criticism of the manager and the structures of the organisation.

Promotion and selection are often based more along relationship lines than on pure performance criteria (as viewed from the western perspective.) Thus, nepotism is rife in Indonesia and viewed with little or no concern. The high-profile cases surrounding the Suharto family amply illustrate how deep-rooted family ties are in the region. Indeed, as connections with the government or other organisations are the key to success, it could be argued that promotion through family connection is probably the most effective approach under the circumstances.

The hierarchical nature of most organisations in Indonesia has given rise to the development of a vast and unwieldy bureaucracy – and this is especially true when dealing with the civil service. (Civil servants who are notoriously badly paid very often have two jobs and are, therefore, not always at their desks to perform the service you require – patience is often sorely tested.)

Author

This country-specific business culture profile was written by Keith Warburton who is the founder of the cultural awareness training consultancy Global Business Culture. 

Global Business culture is a leading training provider in the fields of cross-cultural communication and global virtual team working.  We provide training to global corporations in live classroom-based formats, through webinars and also through our cultural awareness digital learning hub, Global Business Compass.

This World Business Culture profile is designed as an introduction to business culture in Indonesia only and a more detailed understanding needs a more in-depth exploration which we can provide through our training and consultancy services.