Business Knigge Indonesia: First the friendship, then the shops

Indonesia is considered one of the growth markets par excellence; According to a BBC survey conducted among 24,000 people in 24 countries, Indonesia has even been named as the best location for start-ups – even ahead of the US, Canada and Australia. This is increasingly recognized by the German Mittelstand, which has good chances of establishing itself on the Indonesian market with its approximately 240 million potential consumers (and GDP growth of six percent this year). The reason: German expertise and German engineering are in great demand. For example, there is a great need for devices, systems and systems of safety technology. EIBN as projoect co-funded by EU is here to help you understand business opportunity and economy in Indonesia

“Rubber time” prolongs processes

Since the good reputation precedes them, German business travelers are welcomed with open arms and with the typical Indonesian smile. However, this openness should not be deceiving, because the road to success tends to be rocky. A particularly big hurdle is the time perception of the inhabitants. What the Indians call “Indian streching time” is called “Jam karet” in Indonesia, which means “rubber time”. And rubber is a stretchy material. On punctuality Indonesians set no increased value – on the contrary: Who, for example, as a guest on the minute to the agreed date, is considered rude. It is even less polite to lose patience – for example, when business partners do not get to the point quickly enough by European standards. While European culture is very factual, for Indonesians people or collectives come first. For business everyday life, this means that the motto is “first friendship, then business”, the relationship building precedes the business details. This may make negotiations tough, but if you push for quick decisions, you will quickly lose out. For example, one should never insist too early on signing a contract – this is interpreted as a lack of confidence, which, however, is the basis of any contracts and collaborations.

Guidelines instead of duties

Anyway, a harmonious coexistence has a high priority. This often has an effect on the contract, as the credit insurer Atradius knows from experience. In its 10-point business building plan in Indonesia, the company recommends formulating contractual terms as if they were guidelines rather than a list of obligations. In the event that payment problems should arise, Atradius advises affected companies to settle amicably instead of taking drastic measures. Otherwise, a medium to long-term business partnership is massively at risk.

Self-initiative, constructive criticism or suggestions for improvement are very unusual among Indonesian employees. Responsibility is delegated to superiors. Accordingly, it is unlikely that problems are named directly. If there are any signs of maladministration, it is usually too late to correct them. European leaders should therefore be particularly keen to raise the profile of project difficulties.

As in most Asian cultures, Indonesians also attach great importance to hierarchies. For business travelers, this means following rankings, for example, when greeting and negotiating. The title on business cards helps to better assess the position and thus the status of his counterpart. Women still play a comparatively minor role on the archipelago of the islands and are not welcomed first. For private invitations, it is common for only men and guests to be entertained and women to eat at a separate table with the children.

Although more than 80 percent of Indonesia’s inhabitants are Muslims, Islam is not the state religion. People live the so-called Sunni Islam, which is characterized by great tolerance. Women should still cover their shoulders and knees in public. In business, Western clothing – that is men’s suit and tie and costume or pantsuit for women – is the order of the day.

In spite so many minuses and bad news, Indonesia is still considered a great business opportunity. Read more info about business opportunity in Indonesia here.

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