It takes more than just market knowledge, capital and human resources to run a successful business in Indonesia. There are also certain rules of thumb that foreign investors need to understand and pick up when settling in the country or starting a business. Due to dominating diverse and rich cultures and traditions, Indonesian business culture is always a focal point in doing business. Doing business in Indonesia and mingling with the locals require an understanding of the etiquette, rules and customs that must be learned and followed.
We understand that adapting to a new work culture is always very challenging for most foreigners as Indonesian business culture may be hugely different from your home country. With that being said, approaching business in Indonesia requires deliberate perceptiveness and planning towards the cultural dynamics and its business environment, including the frequently changing regulations.
This article serves as a guidance for you to learn all the unwritten rules of Indonesian business culture.
Essential Indonesia Business Culture for Expats
Giving Them Time
Indonesian people have a different attitude towards time and people, which is called the “rubber time” or “jam karet” in Indonesian language. It means that Indonesians approach matters more slowly and believe that their time is flexible and everything needs time to be realised.
For them, building relationships is more important to bring harmony. Therefore, this kind of attitude applies when it comes to showing up at appointments or meeting deadlines.
This different approach in time does bring certain shock and inconvenience to many foreigners and one of the factors that are highly related to bureaucracy in Indonesia. In order for you to achieve a long-term success in doing business in Indonesia, you first need to build positive and healthy relationships with your stakeholders in Indonesia. Indonesians take pride in their hospitality and “relationship first, business second” approach in business.
Taking Indirect Response as Politeness
To reiterate, Indonesians place high importance on maintaining the harmony in every social and personal situation. Therefore, sometimes they will say something indirectly or opposite to express their thoughts and opinions, in order to maintain the harmony and not jeopardize the relationships among each other.
Even though it is done out of politeness of the Indonesians, some foreigners, especially those who are not familiar with this business culture, may interpret the act as dishonesty or hypocrisy.
As an expat with the vision to achieve long-term success, you should not regard this as good or bad business culture. Instead, understand and embrace it for your business advantage.
Related article Company Incorporation Indonesia: Learning from the Expert
Knowing that Authority, Seniority and Hierarchy Are Still Prevalent
The concept of authority, seniority and hierarchy is still commonly found in the business culture in Indonesia, especially in a long-established company with employees of older generations.
During your meeting with an Indonesian partner or company, you are advised to greet the most senior or the highest position first. They should be addressed with their names preceded with titles such as Mr/Mrs/Miss or the name of positions such as Chairman/Director/Manager.
Dining and Indonesian Food
Indonesia has deep passion for food and offers a wide range of versatile local cuisine, as well as cuisines from all over the world. For most Indonesians, it is common to eat in a restaurant for their daily meals or in small food stalls (also known as “warung” in Indonesian) that you can find everywhere on the streets. These “warung-style” food usually serves diverse, delicious and much cheaper dishes compared to a restaurant. So, don’t be shocked if your business partner invites you to a street-food feast sometimes.
If you are the one who invites, do bear in mind that the street food is not recommended if you have a weak stomach. Also, avoid inviting your business partner for meals during the fasting month as the majority of the people are Muslims.
Interested in doing business in Indonesia?
With increasing young generation as well as middle-class population, Indonesia is certainly the country for you to do business. Cekindo’s professional consultants and legal experts can assist you with business incorporation process in Indonesia through our company registration, business license and product registration services, among others. Talk to us now.