Background To Business in Indonesia

The development of business in Indonesia has, for many years, been inextricably linked to political influence and patronage.

It has been virtually impossible to make progress on any major project without the right level of influence with senior people in the relevant government ministry – and the closer one’s contacts to the President, the better.

The last Asian currency crisis has forced the government to address some of the cronyism inherent in all business dealings – and a good deal of progress is being made in this area. (The issues of corruption and graft had reached such a scale that the World Bank, reportedly, had a special category in its cost calculations for major projects, just to cover these unaccountable expenses.)

Such contentious issues as bribery and corruption aside, the Indonesian approach to business shares many similarities with customs and practices found in neighbouring Malaysia – hardly surprising as both countries contain a Muslim, ethnic Malay majority and a small but commercially disproportionately influential Chinese minority. Attitudes and concepts of acceptable behaviour, therefore, focus on such issues as the need to show respect to seniority, the unquestioning acceptance of hierarchical structures and the constant striving for the development and preservation of harmony within the group environment.

Indonesia with a population of 260 million and a rapidly growing economy, represents a significant business opportunity in such areas as electrical goods, automotive, retail and infrastructure. To access this market though, you need to understand the business culture.

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.