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International Business Management

Australia and New Zealand: Doing Business with Indonesia


Case Questions:
1. Using this case and the cultural dimensions explored in this chapter, discuss some of the
ways in which citizens of Australia and New Zealand are members of culture very different
from any other in Asia.
Though geographically part of Asia, Australia and New Zealand have cultural
differences from any other country in Asia. And one good example of such differences can be
observed while doing business in Indonesia. One of the big challenges of working in a
foreign country is learning how to operate in a different cultural setting. In Indonesia, as in
the rest of Asia, there is a greater need to develop a long-term relationship to produce a profit
than there is in Australia or New Zealand. Also, Westerners are punctuality-conscious
people, while Indonesians believe that things can take time.
In most Western countries, efficiency, productivity and effectiveness take priority,
while many Asian countries believe that prioritizing task over relationship may not be the
most effective way to achieve productivity and effectiveness.
2. In what respects is the Indonesian archipelago unique in Asia?
Just having 17,000 islands is already enough to see why Indonesian archipelago is
unique in Asia. However, there are still more with this country. It is the worlds largest
Muslim nation and 4th most populous country with a population of 23 million people. And the
fact that 60% of their people live on the island of Java, just one among the thousands of
islands, is an obvious imbalance of the population distribution within the archipelago.
It is also usual in Indonesia that climatic conditions vary from island to island. For
instance, some regions experience annual heavy rains, while others suffer regularly from
droughts. Also, other areas have fertile volcanic soils, while elsewhere the land is rich in
mineral resources. And so with this uniqueness in terms of extent and diversity, Indonesian
archipelago was described as in a class of its own.
3. What characteristics of Indonesian workplaces are referred to in this profile?
When doing business in Indonesia, there is a need to develop long-term relationships,
which rely on shared expectations. It is also essential to know how to manage the difference

on the cultural setting here, especially that there are Indonesian concepts like of jam karet,
or rubber time, that infuriates punctuality-conscious Westerners in Indonesia. Also, they
usually place more value on harmony, understanding, and mutual respect in workplaces,
which sometimes out-weighs the importance of job performance and productivity.
Indonesians also believe that Westerners should make an effort to adjust to their
culture. And so, foreign managers with Indonesian colleagues need to maintain a workplace
whereas individual cases, cultural needs and religious obligations should be willing to
consider. Likewise, Indonesian managers should also be willing to make any adjustments to
working in an international company. Because in Indonesian business culture, sensitivity to
the needs of the employees is one management area that is greatly stressed.
4. How does the population appear to be stratified?
Aside from imbalance in population distribution in Indonesia, there is unfortunately
another obvious disparity. In all the regions of the country, the socio-economic differences of
the people are evident. The wealthy elites are at the top of the social structure, an
increasingly demanding middle class below them, and an impoverished majority at the
bottom.
5. What are some business opportunities in Indonesia for foreign direct investment?
Business opportunities in Indonesia for foreign direct investment include
agribusiness, the automotive industry, business and financial service, construction and
infrastructure, information and communication technology, e-commerce, education and
training; environmental products and services, food and beverages, fresh produce, health and
medical provisions, mining and mineral services, oil and petroleum drilling, transport and
storage, and science and technology.

Reference(s):
Deresky, Helen, (2013) International Management: Managing Across Borders and Cultures
Text and Cases, Pearson, Global Edition, 8/E.