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Business Across Cultures: Lessons Learned

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I have been aware of the importance of cultural differences for many years and have made it something of a mission to encourage and support cross-cultural understanding between the foreign companies working here in Indonesia, their expatriate and Indonesian employees, and the public sector. Sometimes, I think that this message falls on deaf ears. But every so often someone of great standing, a chief of business or high government official, comes along and reinforces this message for business.

Mr. Dennis de Tray, former World Bank Country Director for Indonesia, recently addressed the Indonesian Forum of Economists in Jakarta. He, of course, has a primary focus on financial matters, but his comments are true for all international business here. Toward the end of that address he said:

“The final message of this experience for me is that culture matters. Now, of course, everyone knows this. We are taught to be sensitive to the different cultures. We've all read Culture Shock: Indonesia. But I am convinced that we really do not understand the implication of cultural differences in designing interventions, especially in times of crisis. I am sure that “culture” will be a part of the ultimate explanation of what happened in East Asia. Different cultures really do look on business relations differently. This is no more clearly illustrated than the area of conflict of interest. It is just not a concept that is in the people's vocabulary here in Indonesia. It is not understood. In fact, the opposite is true: it is my obligation to help you as a friend and colleague.”

Understanding cultural differences in Indonesia is more important and more difficult than understanding them in other countries. Americans working in Australia, Germans working in England, or South Africans working in Malaysia, will all have to understand how culture affects them. But here, Indonesian, and in particular Javanese, culture goes to the very heart of the business culture. Saving face, maintaining harmony, and showing respect will usually take precedence over job performance. Usually, but not always.

Many Indonesian Bapak have either been educated or worked in the west. The Indonesian government has been sending its personnel overseas to study for many years and some of those employees are now reaching high positions. Employees of western companies often undergo extensive training in Indonesia and abroad. Long serving Indonesian employees who have not been abroad have usually learned through experience and observation what is expected in an international office.

Many if not most of your top managers will on a day-to-day basis put forward a serious and professional manner (in a western sense). However, as Mr. de Tray observed, cultural differences come out “especially in times of crisis.” When serious or unexpected problems occur in the workplace, many people naturally revert to their cultural roots. This is not only true for Indonesian employees but for expatriate employees also. It is easy for employees to get along together when everything is going well. However, as many international companies are finding out these days, in times of crisis, working relationships can deteriorate quickly and for many reasons.

Mr. de Tray went on to say: “In the negotiations that the international financial institutions have had here with the government, I have watched our technical people become extraordinarily frustrated because they can't impose their highly western, aggressive, conflictual program that requires people to admit their errors and be very open and transparent. These are antithetical to the cultural foundation of much of this country. That's a fact, it's not good or bad, just a fact.”

He is correct on many points in his statements, but two stand out here. First and above all, “it's not good or bad, just a fact.” Looking at any host country's culture in terms of “good or bad” is a major cross-cultural error. It can anger the host country nationals and frustrate you. The cultures are different. Some aspects you may want to incorporate into the job performance of your employees and others you may want to eliminate. But they should never be referred to in terms of “Good Western Values” or “Bad Indonesian Values”.

The second point is frustration, like the kind felt by Mr. de Tray's technical people. In my opinion, this is the single most important cause of failed postings by expatriate employees and of failing work relationships in multicultural offices. I think that it is safe enough to say that any employee experiences frustration at some point in the performance of their jobs. The frustration that I am referring to here is that caused by the cultural barriers encountered in that job performance.

Frustration in cross-cultural situations is common. It is, however, one of the most easily remedied of the problems facing a multicultural work force. The remedy is knowledge. Knowledge of how the other parties in a multicultural work situation perceive themselves. Specific knowledge of the other's culture and what forces it exerts on him or her. Such knowledge comes from experience and personal observation accelerated by professional cross-cultural orientation and training programs. When frustration declines, efficiency goes up. I see this often in international companies in Indonesia.

The lessons learned by the World Bank in Indonesia should have long ranging effects on their interventions in future crises. The lessons that you and your company learn in yoru current crisis should have the same long lasting influence; one of which is “that culture matters.”

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