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Business Across Cultures: Opening the Relationship with Indonesian Businesses

In the darker corners of the bars in Blok M, one can listen to the commiserations and conversations of the expatriates of Jakarta. Not too long ago, I chanced to overhear the following exchange between John Thomas of Perth and Townsend Simely of Liverpool. John started, “I just don't understand it. This deal had everything going for it. It provided the same quality of material for the building project at less cost to the contractor. He should have grabbed it. In fact, I would have thought he'd be required to take the lowest offer on comparable goods.” Townsend asked, “How did you present your proposal?” John replied, “Well, I had all of the product specs and cost break downs faxed to him and then I flew in to present the offer and sign the deal.” “You know,” he continued, “I don't really have time to spend sitting here in Jakarta. In this age of telecommunications and globalization, I really shouldn't even have to come here much less open an office.” Townsend considered that.

Today, many western businessmen have a “time is money” mentality, where price is the bottom line and personal relationships have little place in business. Even though Indonesia is quickly moving into a global market economy, this approach does not work well yet. Here the majority of business is based on specific and personal relationships between Bapak, officials, officers and company executives. When we start talking about doing business in Indonesia, we are talking about Opening The Relationship.

Any western businessman worth his salt has heard of the importance of the relationship in Asian business. In Indonesia, it is perhaps more important than in many other Asian countries. Relationships, and the status, responsibilities and obligations that they impose, go to the very foundation of Javanese culture. The primary relationship is the family, particularly of a child to the parent which is that of a subordinate to a superior. Next comes a horizontal system of relationships binding the individual to the group. A Javanese should actively look after the interests of others in his group and expects others to look out for his interests in return. Above and below this level are superiors and subordinates, with responsibilities and obligations to the group of their own. This system of relationships extends to village, ethnic group and nation. We also see it in Indonesian business culture. In order to do business with a Bapak you must be in a relationship with him. This relationship determines the way you get contracts signed and how the contracts are executed. While signing of a contract in the West often indicates the completion of a negotiation, here it indicates the beginning of a relationship.

Never write when you can call, and never call if you can meet.

Townsend Simely was transferred from England to Indonesia over eight years ago. Well-educated and culturally astute, he has been quite successful in protecting and expanding his company's interests. There are two basic rules that he tries to follow while developing Indonesian business contacts. First is: Keep it personal. Never write when you can call and never call if you can meet. Initial letters may go unanswered or be responded to by a subordinate.

Writings can be used to confirm what has been previously discussed, but always try to bring up new ideas or proposals in a face-to-face meeting. In that meeting, try to begin with a period of small talk. If it is a first meeting, use the time to get to know one another. Generally, it is not impolite to ask about personal matters with a Bapak. There are few Indonesians indeed who would not like to talk about the achievements and accomplishments of their offspring. In future meetings, ask about these topics. Remember, a Bapak has a very specific status and many formalities must be observed, but questions so personal that they may make a westerner uncomfortable, are not among them.

Second: Keep it Polite. This is probably the most important thing to remember in maintaining Western-Indonesian business relationships. Yelling does not help the situation. Javanese culture separates the inner and outer beings of a person. One of the classic traits of Kejawen, or being Javanese, is to maintain an outward state of calm. Displays of negative emotion on the part of a Western businessman may confuse and embarrass an Indonesian counterpart. The result of such confusion or embarrassment may be a withdrawal of the Bapak from the relationship with the offending party. Regardless of how angry you may become, don't show it and keep smiling.

One of the classic traits of Kejawen, or being Javanese, is to maintain an outward state of calm. “If you run into an unexpected problem in a meeting with a Bapak, keep smiling, take a step back, and try to figure out what is happening,” suggests Townsend. This may mean that you need to end the meeting and use your network of intermediaries to find out what the real problem is. It may be something that you have done, something the Bapak's staff has done or instructions from a higher authority that may be complicating the execution of a deal. Consider all of the options.

To do business effectively, your Indonesian contacts have to feel that they are in a relationship with you. Once-a-quarter visits from your base in Australia will not be enough. You must have a steady, reliable presence here that demonstrates your long-term commitment to doing business in Indonesia.

Finally Townsend Simely looked at John Thomas and said, “I have seen it time and time again, foreigners coming in to Indonesia to make a quick buck with what they think is a great idea. You have two choices. You can commit to Indonesia, open an office, form relationships, and rise and fall with its fortunes, or you can continue to beat your head against the door and hope someone answers.” John looked at Townsend, muttered “I don't have time for this,” and ordered another beer.

This article was generously contributed by George B. Whitfield, III when he was a Technical Advisor with Executive Orientation Services.