Australia and New Zealand: Doing Business with Indonesia

Case Study-Australia and New Zealand: Doing Business with Indonesia

1. While Western countries may take priority in efficiency, productivity, effectiveness, and timetable deadlines, Asian countries take more priority in understanding and forming long-term relationships with patience and getting to know each other. Indonesians would always put up a smile, no matter how angry they may be inside. They maintain harmony of the office by giving the outward appearance that there is nothing wrong. Also, Indonesian workers do not communicate bad news to the boss and situations that seem insurmountable to an employee may simply be ignored, because Indonesian workers seem to expect a firing squad when they have to report failure. Therefore, the Australian and New Zealand workers would need to spend more time observing and listening to their Indonesian employees to better understand them, and to also make clear to the Indonesians that they want and expect subordinates to come to them with questions or problems and that the response will be non-judgmental and self-controlled.

2. The Indonesian archipelago is unique as it is a country of more than 17, 000 islands, with climate conditions that vary from island to island. The islands are unique in terms of extent and diversity. Java and Bali, 2 islands of Indonesia, have fertile volcanic soils, while other parts of the land are rich in mineral resources such as oil, natural gas, and coal. Some regions of the islands also experience annual heavy rains and floods, while other regions suffer regularly from droughts that often lead to famines. Also, about 60% of the Indonesian population lives on the island of Java, as it is the island with the greatest settlement population.

3. The Indonesians focus on relationships, as they like to develop long-term relationships with other firms and partners. Their relationships rely on shared expectations such as how appointments should be set, and how deals should be closed. As they might be colleagues, business associates, or paid consultants, the Indonesians like to give advice. The Indonesian managers usually prioritize harmony, understanding, and mutual respect, which may outweigh the importance of job performance and productivity. The Indonesians also have concepts such as “jam karet” or “rubber time” that infuriates punctuality-conscious Westerners.

4. Indonesia is socially stratified by 3 categories in the social structure. At the very top are the wealthy elites, then the middle class, and at the bottom are the impoverished majorities.

5. There are many business opportunities in Indonesia for foreign direct investment. Some of the list includes agribusiness, the automotive industry, construction and infrastructure, business and financial services, education and training, environmental products and services, food and beverages, fresh produce, health and medical provisions, and mining and mineral services. All these opportunities would require skillful negotiation.

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