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Business Across Cultures: Repetitions

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Someone once said that the more things change, the more they remain the same. The changes that have occurred in Indonesia since the resignation of President Suharto have indeed been profound. As the U.S. ambassador-designate to Indonesia, Mr. Robert S. Gelbard, noted in his recent U.S. Senate confirmation testimony, “If Indonesia overcomes the immediate-term challenges of getting a government viewed as legitimate and providing for a credible consultation process in East Timor, it will have made one of the most stunning political transformations of any nation this decade.”

The world press pushed Indonesia to the forefront of the news last year with pictures of bloody rioting and uprisings; this year they are showing pictures of a mostly peaceful electoral process. Many of our home offices were greatly concerned by the first and comforted by the second. So, if everything proceeds smoothly with the presidential appointment, then we all have a new, clean government leading a nation with transparent business practices-or so many home office theories go.

When the recent Bank Bali scandal came to the public's attention, I heard a visiting businessman comment, “I thought they had cleared that kind of thing up.”

Not yet. The old powers may be trying to recoup their losses and damages to the detriment of the new, young economy that is emerging. The method by which the Bank Bali parties tried to recoup losses is traditional in nature. The use of third-party intermediaries to secure a goal that you could not yourself realize is a tried and true method of conflict resolution in Asia generally and Indonesia specifically.

The major changes in economic transparency involve the reporting on cases of corruption and abuse of power and not the instances of such corruption. The calls for Reformasi and identifying KKN are growing. However, it appears that Indonesian society is only requiring that the top businessmen and government leaders be held responsible for their actions (or at least be embarrassed by them).

I recently heard the phrase Transparency Through Gossip used to describe the current calls for accountability. This tongue-in-cheek name for a serious theory involves the emerging business and political forces' move into positions that will enable them to take advantage of the new patronage situations that will arise after the next MPR/Presidential appointment scheduled for November. Because that outcome is not yet foreseeable, most accusations that can be made to the detriment of one's opponents, will be.

Fortunately, this allows for access to information on KKN that might otherwise never rise to the surface. Unfortunately, once a new government is established and a new administration is in place, there is a strong possibility that public accusations of KKN will diminish as the cut of the pie is spread around.

However, the main point that I wish to make in this column is that the day-to-day business culture that existed under Suharto's New Order government, that being the method of securing contracts, licenses and permits for the majority of small and medium business, remains basically the same today.

The middle and certainly lower level populations are still involved (or entrapped) in the Kerjasama approach that has existed in Indonesia for hundreds of years.

Kerjasama describes the idea of Korupsi (as in KKN) at the middle and lower levels of society. While the West may translate Korupsi as Corruption and as such be seen in a very negative light, many people in Indonesia see Kerjasama as Cooperation, and the spreading of wealth that it involves, as a normal part of the trading day.

Securing a commercial building permit in a residentially zoned area, or paying “insurance” to make sure that your Warung Kopi continues to exist on the sidewalk of a major shopping plaza are examples of Kerja Sama.

In the work place, this may involve non-budgetary income to hiring and purchasing managers, suppliers and distributors, or accounting and financial staff. This is not a new idea. The same necessity to monitor Tempat Basah (Wet Places) in the financial transactions of your company is as great now as it has ever been. Actually, it may have become more important.

As in all of my columns, reliable international business operations relate to the presence or absence of solid work relationships between expatriate managers and their Indonesian counterparts. Generally, if no relationship exists, then there is no employment obligation to uphold, period. To complicate things more, in Indonesia, office relationships can break down without the expatriate managers understanding the outward cultural signals.

As power shifts freely in these times of change, the obligation to protect your community, especially the office community, becomes difficult to define. “Will I have a job that will be here next year?” “If not, what should I do?” These are two questions that many Indonesian employees are asking themselves.

My conclusion as to the effect that all of this may have on your business operations is cautionary in nature. Do not expect that the deep seated influence of Kerjasama has disappeared with the reformation process. The calls for justice and transparency are aimed at the political elite-not necessarily your company. Your managers and supervisors may be willing to compromise the integrity of the employer-employee relationship by accepting non-budgetary income from other employees, suppliers, or distributors. This has not yet changed and most probably will not change for years to come-thereby repeating the mistakes of the past for another generation.


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

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