Indonesian culture | Communicaid Blog | Cross Cultural Training and International Communication Skills

Mar 09

Doing Business in Indonesia – Successfully Navigating these Culturally Diverse Islands

Indonesia has one of the world’s fastest growing economies and the largest in Southeast Asia. According to a recent article on BBC, Indonesia’s economy is growing at its fastest rate since 2004. Steady consumer spending, improved political stability and abundant natural resources combined with an increasing number of organisations reinvesting profits into their businesses are just a few of the contributing factors.

Jakarta Warren Goldswain i Doing Business in Indonesia Successfully Navigating these Culturally Diverse Islands

With a population in excess of 245 million people and growing, Indonesia is the fourth most populated country in the world and is home to a large domestic economy and labour force ready for foreign investment. This makes this country an attractive destination for foreign investment and a growing number of global organisations are increasingly taking advantage of this thriving economy.

Indonesia is home to a large, cheap labour force which is an attractive asset to manufacturers who can save a significant amount of labour costs by relocating their operations to the country. This combined with opportunities to access new markets through Indonesia’s geographical positioning as a gateway to other South East Asian countries like Thailand or India makes it an even more appealing location for doing business.

Located on an immense archipelago of over 17,500 islands, Indonesian culture is a mixture of different cultural, religious and ethnic influences. While there is a cosmopolitan vibe in the bigger cities where most things are written in English, it is important to prepare yourself for the cultural differences you may encounter when doing business in Indonesia.

One of the most challenging aspects of Indonesian culture is the diversity of religions practised in the country and the impact they have on business and social culture. Indonesia is currently the largest Islamic country in the world with approximately 202 million followers, and it is also home to a number of other religions including Catholicism, Hinduism and Buddhism.

While the Indonesian constitution guarantees the right to freedom of religion, its state ideology Pancasila includes an element of believing in ‘the one and only God’. Religion has a great impact on all aspects of Indonesian social and business culture so it’s essential to understand its role when doing business in Indonesia.

As the majority of the population of Indonesia is Muslim, you may find that a large number of your counterparts in Indonesia will adhere to Islamic practices such as Friday afternoon prayers. If you are running an operation in Indonesia, it is a good idea to create a prayer room in the office where they can take time for their religious beliefs. An intercultural training course like Doing Business in Indonesia can help you to understand other areas of Islam and how it may impact your interactions with Indonesian counterparts so that you can show respect to their requirements in the most appropriate way.

Religious diversity is only one aspect of doing business in Indonesia which foreigners may find challenging. An intercultural training course will help you to understand the other cultural beliefs and attitudes you will find when doing business in Indonesia. The importance of the group, respect toward elders and different communication styles are some of areas anyone doing business in Indonesia may find different from what they are used to.

Understanding how your Indonesian counterparts think and behave in the context of the cultural diversity of their society will help you to successfully navigate Indonesian social and business culture and harness the immense benefits of this dynamic economy and culture.

© Communicaid Group Ltd. 2011

Tagged with: Doing business in Indonesia • Impact of culture in Indonesia • Indonesia business culture • Indonesian culture • Working with Indonesians

Jun 14

Challenges of Doing Business in Indonesia

Cross Cultural Training, Cultural training for Relocation, Culture, Culture training for Business & Management, Culture training for Human Resources, Culture training for the Public sector No Comments »

Indonesia has a fast growing economy and today has the largest economy in South East Asia. Indonesia’s unique traditions and beliefs all contribute to Indonesian social and business culture. Communicaid’s cross cultural awareness training course Doing Business in Indonesia provides insight on the cultural behaviour and provides solutions to possible cultural challenges of doing business in Indonesia.

Doing business in Indonesia requires the ability to understand and deal with some of the possible challenges outlined below:

Collectivism
Indonesian society is very collectivist which means that they tend to place a higher importance on the group than on the individual. Family, extended family and the community are very important and will always be placed above individuals or business. Closely linked with collectivism is the importance of personal relationships and relationship building. When doing business in Indonesia, long-term relationships based on trust and familiarity are essential. Personal contacts and networks are important in making business deals and will help you improve your success of doing business in Indonesia.

Religion
Almost 90% of the population in Indonesia is Muslim (CIA World Factbook) making it home to the largest Islamic population of any country in the world. Showing respect towards their religion is very important when doing business in Indonesia. Although the influence of religion varies by from one organsiation to another, Indonesians will generally pray five times a day and Ramadan is celebrated nationwide. Understanding religious and other traditional customs of Islam will help you to be more successful when doing business in Indonesia.

Communication Style
Differences in styles of communication are often a reason for cross-cultural misunderstandings and faux-pas. To get a full understanding of Indonesian business etiquette it is important to understand their preference for a high context and indirect style. In other words, Indonesians tend to place a high importance on body language and non-verbal communication. Indonesians also tend to speak in a subtle way and would never directly speak their minds in public. As in many Asian and collectivist societies the concept of ‘saving face’ is very important. Indonesians will do anything to avoid losing face, so you should consider this seriously when doing business with Indonesians. Communicaid’s cross-cultural awareness training course Doing Business in Indonesia can help you understand how Indonesians communicate and will provide you with solutions to better deal with high context societies.

Time Management
Indonesians have a very relaxed attitude to time. The focus on building relationships is highly valued and much time can be spent on this before getting into the business task at hand. For people that come from monochronic cultures this way of doing business can be very frustrating and could cause misunderstandings when doing business in Indonesia.

Understanding Indonesian social and business culture will help you to be more effective when doing business in Indonesia. Communicaid’s Intercultural Training Indonesia courses will provide you with the understanding and tools to succeed when building relationships with Indonesians or doing business in Indonesia.

© Communicaid Group Ltd. 2010