Indonesia Culture of Business

By | July 24, 2022

Subchapters:

  • Introduction
  • Addressing
  • Business Meeting
  • Communication
  • Recommendations
  • Public Holidays

Introduction

Indonesia’s diversity is rooted in its essence as an archipelagic nation composed of more than 17,000 islands located in three time zones and inhabited by a quarter of a billion people of various ethnicities and religions. The seemingly disparate and colorful conglomerate, however, has a strong bond of belonging to Indonesian nationhood, best expressed by the country’s credo of ‘Bhinneka Tunggal Ika’, meaning ‘unity in diversity’. From the point of view of business, the central place is the island of Java (140 million inhabitants on 130 km2), where a large part of economic activities is concentrated, and where the metropolis Jakarta, which is the center of trade and finance, is located. However, each island has its center of excellence, and from the Czech exporter’s point of view it is certainly worth exploring the more remote markets towards the east, from which a lower level of saturation can be expected, and therefore a number of opportunities,

Addressing

Even though, from our point of view, Indonesians use first names “as if” and therefore often address foreign partners by their first name, it is in no way a matter of touching and addressing should always be associated with the title Mr. or Ms., or in English Mr. (or more respectfully Sir) and Ms. Alternatively, it is possible to flash the local “Pak” (pronounced with a silent “k” as Pa[k]) or “Ibu” in the case of a lady, which is sometimes shortened to “Bu”. The conversation should start with a personal introduction, clarification/acceptance of roles on one’s own, but above all on the partner’s, Indonesian side, where a hierarchy is always present. In most cases, seniority is evident from age, or from obvious expressions of respect shown to the most important person. It is good to have an idea in advance about who is who, however, it is usually possible to spot it from the behavior of the partners. It is a good idea to start the conversation with a non-business, personal topic, e.g. share your (of course positive) impressions or experiences with Indonesia, say something about yourself (your family), or ask the interview partner something similar. It is important to show that there is a real interest in the person of the partner and not just in one’s own business and related financial, logistical and technical issues.

Business meeting

Indonesia is a predominantly Muslim country. When planning a trip to the country for the purpose of negotiations or inviting partners, you should keep in mind the fasting month of Ramadan and the following week of celebrations, the date of which is movable (eg April 2, 2022 to May 2, 2022). It is likely that the activities and availability of partners will be limited and it is better to avoid this period if possible. Business negotiations in Indonesia do not have strictly defined times and can take place more or less at any time of the day (even late in the evening). However, from our point of view, the problem is frequent changes and cancellations of arranged meetings, or unexpected absences or delays of promised decision-makers. This is partly due to the complex traffic situation , which naturally also causes delays of several hours, or the necessity to cancel an already arranged meeting citing a “traffic jam”. However, this seemingly objective excuse can also be easily abused to change plans and prioritize another program, and is actually used relatively often. Last but not least, changing the program and time of meetings serves to emphasize the importance and value of the partner’s time, who, for example, “had to fly somewhere suddenly”…preferably for a meeting with someone very important. At the same time, in a certain sense, it is also about testing the interest and stamina of the foreign partner, often even in a situation where he or she has already scheduled a return flight home and has to change plans if the key meeting is to take place on a new date. In the case of a really important meeting, it is worth considering whether to change your program or not.

  • PaulSourcing: Tips and recommendations for doing business with Indonesia. Also includes country basic data and information for entering the its market.

In any case, it is necessary to react without emotion and play the game that the reasons for the delay or change are clearly understood as true and understandable. Indonesians love to laugh and have a sense of humor. However, Czech humor is quite specific and is not always understood (not only) in Indonesia, or it can be misleading and, in extreme cases, it can at least make your partner feel insecure, or even offend. Sarcasm, black humor and similar categories are therefore better left at least for later, when the partner has gained some confidence and will not apply these expressions of humor to his person. Indonesians are proud of their country, culture, and outwardly honor and respect their leaders and the diversity of religions, even if internally they do not necessarily identify with certain politicians and prefer their particular religion. For foreigners, especially in introductory conversations, the given topics should be left behind and certainly taboo in the sense of criticism and making categorical opinions. The country’s colonial past can also be a potentially sensitive topic. Of course, this does not mean that a foreigner should not show an interest (prove knowledge and overview) about the country’s politics and history or knowledge of a topic related to religion. It is always necessary to estimate who is the most important person on the partner’s side. He doesn’t necessarily have to be the one doing the talking – the senior person may show his importance by not dealing with the details of the business, or (which is not uncommon) he may not be very good at English. Even in this situation, it is necessary to have a conversation with the person who will perhaps become the main coordinator of the later practical business, but not to overlook the main person, to talk towards him, Gifts certainly do not offend Indonesians. In the case of alcohol, however, one must be sure that the partner will appreciate the gift and will not take the gift as an insult or a certain questioning of his (Muslim) faith.

Many Indonesians (not only non-Muslims) like to drink alcohol, and the appropriateness of such a gift is not at all excluded, however, if there is any doubt, it is better to avoid alcohol, or save it for a later occasion. Food plays a central role for Indonesians. It is therefore not unusual that during the meeting a question is asked about the interest in refreshments, or this is immediately brought up (for example, when visiting a partner’s office). Indonesians’ relationship with food is captured by the saying “makan dulu” (food first/food is most important). If you mention them in the mentioned situation, when the partner invites you to eat, he will undoubtedly respond with a tone of approval and a smile, and you will get well-deserved points. By the same token, it’s not a good idea to let Indonesians starve (at least it’s polite to offer) if the role of host is more on your side. In the later stage of building a partnership, joint lunches or dinners are an essential part. The rule is that the inviting person organizes such an event under his direction. Indonesians like to boast of a good and sometimes (but not necessarily) expensive restaurant with specialties of Indonesian cuisine. In the case of the opposite visit, it is necessary to take into account reciprocal expectations. In the case of Muslims, it is necessary to remember possible halal restrictions in the menu (alcohol, pork – watch out for small pieces of pork ham in soup or on pizza, etc.). When it comes to clothing, long pants and sturdy leather shoes are the minimum and absolutely necessary. The shirt can also be short-sleeved on less formal occasions (Indonesia is hot and humid all year round). For more important meetings, it’s a good idea to add a jacket or a tie, but it’s not necessary for a restaurant. Even with regard to the climatic conditions, the so-called¬†batik – colorful batik shirt. Batik is considered to be socially fully adequate and matching the suit, and it is also quite comfortable to wear considering the climate. Even a foreigner can use batik and, in addition, present an appreciation of the local culture. However, even batik must be able to be worn and there is a whole range of fashion and price nuances. The local knows well whether it is a cheap product (which his driver wears) or whether it is, for example, a piece worth several thousand CZK.

Communication

Communicating with Indonesians is a chapter unto itself. Most essential matters, especially in the framework of establishing cooperation, really need to be discussed in person, and long-distance communication usually does not lead effectively to the goal. However, representatives without decision-making powers are often delegated to meetings. For example, an interesting and seemingly promising conversation will take place, but it does not have any further factual development, or rather it may just open the way to another meeting at a higher level. However, even if you already get into personal communication with an adequately positioned person, there is often a different interpretation of his results. While the foreign partner often leaves with the feeling of having reached a concrete agreement and the promise of follow-up steps, the local may understand it only as an initial introductory conversation.In terms of long-distance communication, Indonesians are not very fond of e-mail. It often happens that the answer to the email comes late or not at all. On the contrary, they prefer communication through applications on their smart phones. Can’t function without WhatsApp in Indonesia. Establishing promising communication and gaining access to a partner is not handing over a business card (many don’t even have one here, or don’t give it), but getting his WA contact. When communicating with a foreigner, the use of English is assumed, and the local party usually arranges for at least one speaker in case the others do not speak English. In remote regions, the situation with securing such a speaker can be more complicated.¬†Visit Animalerts for more information about Indonesia culture and traditions.

A popular motto says: “Indonesia is only ONE WHATSAPP AWAY.”

Recommendation

Although at first glance they appear to be smiling, direct and helpful, Indonesians are somewhat formalistic in their social and work interactions and place great emphasis on hierarchy and respect for social status. This does not mean that personal or business contact with them would take place without smiles or friendly (and later) expressions of contact. However, it is necessary to make it clear that respect and hierarchy are understood and that the partner is safely conforming that he is being given the attention and respect he deserves. And if there is even a little more respect, it is not harmful, while on the contrary it must never be. Later, after getting to know each other better and establishing trust, he often moves quite smoothly to more intimate, friendly and informal expressions and ways.

The basis of networking in Indonesia is to get the right contact who will introduce the foreigner to the local environment and introduce him to other people in his circle. The problem is that most of the people you encounter in the first activities will brag about who they know everything about. This may not be untrue (everyone really knows everyone in business in Indonesia). But the question is whether the person has real access to key contacts and will provide a good and credible reference. Indonesians are fond of golf, which generally provides a very good platform for networking activities.

Public Holidays

  1. 1. New Year
  2. 2. Chinese New Year

2The Ascension of the Prophet Muhammad

  1. 3. Day of silence
  2. 4. Good Friday
  3. 5. Labor Day

1.- 2. Idul Fitri (end of the fasting month of Ramadan and other free days announced by the government

1Vesak (Buddha’s Day)

Pancasila Day

20.7. Hari Raya Adha

29.7. Muharram (Islamic New Year)

8/17 Independence Day – Marks the beginning of the revolution against the Netherlands in 1945

  1. 10. Birth of Prophet Muhammad

24-25 12. Christmas

Indonesia Culture of Business