Don’t baulk at the batik: 4 tips for doing business in Indonesia

First published in BRW 4 November 2014

Alex Murphy Alex Murphy
Managing Director

Indonesia is an emerging economic force and is currently the world’s third fastest growing consumer market. It is one of Australia’s most important bilateral relationships and Austrade estimates that there are currently more than 400 Australian companies operating in Indonesia. There is a wealth of opportunities to be explored for these two countries, and great potential to share partnerships across education, agribusiness, health, training and ICT.

My personal connection with Indonesia has given me an insight into the nation’s business culture. I was initially encouraged to participate in Asian social studies at school, and learnt to speak the main Indonesian language, Bahasa Indonesia.

This early experience encouraged me to continue my education in Indonesian and Malayan studies at university, and spent many summer holiday breaks in Indonesia. I later spent three years living in Jakarta, teaching English to adults and taking advantage of the opening up of the global economy in the early 1990s.

On my return to Australia, I began working at UTS:INSEARCH, a pathway provider to the University of Technology Sydney, building offshore English language programs and teaching Indonesian to students and large companies who were beginning to invest in doing business with Indonesia.

Having helped to build UTS:INSEARCH’s business across Asia over the past 20 years, it is clear to me the importance of relationships with Indonesians should not be underestimated by us as Australians.

Learning to speak Bahasa is a positive step (although not essential) for working with Indonesia. However, it is vital to have the ‘cultural intelligence’ to understand the nuances of their way of working. The Indonesian culture is complex, fascinating and comes with its own set of customs. Here are some of my observations on approaching business successfully in Indonesia:

Honouring tradition builds respect

Succeeding in the Indonesian business landscape means respecting and embracing tradition. For important events in Indonesia, such as the opening of a new business or the launch of a new venture, it is important to take part in the ceremonial activities. This can include wearing ceremonial clothing (for men this usually features batik), and in some cases involves singing, dancing and other forms of celebration. The Indonesians honour tradition. Understanding this and accepting traditional practices will go a long way to generating long term connections.

Building relationships

Spend time investing in relationships with your Indonesian counterparts. Jumping straight into negotiations or business matters is considered rude, so take time to get to know the person you are meeting and demonstrate trust and loyalty in not only building a relationship, but sustaining it. Serious relationships are often built over “power breakfasts” or lunches and dinners, so you need to invest your attention.

Allow time

When in Indonesia, I would recommend scheduling half the appointments you would normally make when here in Australia. This not only allows for the predictable and extensive traffic delays in major cities, but meetings should not be rushed. Offering to arrange appointments outside of designated business hours can show that you are serious about building a particular relationship.

Negotiate before the meeting

Formal meetings are not the time to try to negotiate what you need, as decisions will almost always have been made beforehand. These meetings are more about formalising decisions, so ensure you have put all your plans and requirements forward well in advance to allow the other party to announce and celebrate their decision when face to face.

In my experience, these approaches are more important than learning the superficial cultural “dos and don’ts” noted in travel guides. Indonesians are less likely to be offended by any Western habits if you convey genuine interest and sincerity, simply following the “dos and don’ts” won’t make up for a lack of sincerity.

In 2012, Australia’s two way trade with Indonesia was worth $14.6 billion, and as Indonesia’s economy continues to grow, there will be opportunities for many Australian businesses and educational institutions to benefit from forging a stronger relationship with their counterparts. Fostering personal connections with this exciting, culture-rich country has the potential to lead you on a rewarding journey.

Alex Murphy, Managing Director of UTS:INSEARCH, recently attended the second annual Conference of Australian and Indonesian Youth (CAUSINDY) in Jakarta, CAUSINDY aims to foster bilateral relations between young professionals in Australia and Indonesia.

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