Australia and New Zealand: Doing Business with Indonesia
Part 1:
Case Summary:
Indonesia is the world's largest Muslim population and the fourth most populous country in the world.
Australia and New Zealand share trade and education with Indonesia.
While some Asian countries are pulling back from perceived threats of international contagion, Indonesia continues to open up its market to world enterprise which gives Australia and New Zealand the opportunity to do business there.
Long-term relationships are the most important in Indonesia in order to produce profit.
Westerns should make an effort to adjust to the culture, taboos, and language in Indonesia. At the same time, Indonesian managers should be willing to make many adjustments in working with an international company.
Main Issues:
Australia and New Zealand face challenges on how to operate in Indonesia due to the big difference in their culture.
Learning Indonesia's shared expectations such as how the first contacts should be made, how appointments should be set and kept, how deals should be closed, and how time should be managed.
There are a number of concerns for Indonesian managers working with their Western counterparts where Indonesian managers believe that Westerners should make an effort to adjust to the culture, taboos, and language of their Indonesian colleagues.
Bad news may not be communicated to the boss and situations that seem insurmountable to an employee may be ignored. This behavior is not accepted in some parts of Western cultures which is why Western managers need to spend more time listening to their Indonesian employees than they would back home.
Concept:
Hofstede's four value dimensions (Power distance, uncertainty avoidance, individualism, and masculinity) talk about the understanding of different cultures. The cultural differences between Australia and New Zealand compared to Indonesia are immeasurable. Managers doing business in Indonesia without learning about their cultural differences will face many problems such as differences in management style, missed appointments, and labor problems between foreign management and local staff.
Cultural sensitivity where managers from Western countries have to be aware of the Indonesian's culture by having the required skills and knowledge, and the ability to understand the perspective of people living in a different society. For example, they might need to learn the Indonesian language to be able to communicate better and also consider religious obligations since Indonesia is known as the world's largest Muslim population.
Indonesia became more integrated with ASEAN; a free trade area where there is common tariffs among members and individual tariffs with