When travelling to Indonesia for business, you have to know the local business culture and etiquette. Here are 10 things you need to know about the how the Indonesians do business.
While business cards in English are acceptable, translating them into Indonesian on the back of your card is seen as an additional sign of respect for the local language and culture.
When hanging out business cards, remember to use both hands or just the right hand. Never use the left hand as it is considered "unclean". Business cards can be exchanged after the initial handshake greeting. As with all other name card exchange, do take a moment to examine the business card before keeping it. This shows respect.
Indonesians value politeness. It is important to be respectful and personable in your conversations and discussions, speak softly and avoid confrontational or aggressive language. At the same time, allow your Indonesian counterparts room to speak, and avoid interrupting them. This will show disrespect, and might intimidate them, causing them to be reluctant to share their opinions.
When formally addressing letters to Indonesians, it is customary to write all names in full. For example, "Mr. Sudjana Santosa" or "Mr. Sudjana" would be appropriate. In conversations, you can use the same forms of addressing them, and as the relationship develops, you can start to address them by their first name "Sudjana".
When it comes to various titles used in Indonesia, it varies for males and females, as well as their university degrees. The titles "Drs" (for males) and "Dra" (for females) indicate a university graduate in social sciences or arts. "Ir" indicates a graduate in engineering or technical sciences. "DR" signifies a Ph.D., while "Dr" indicates a medical graduate.
Indonesians generally take an unaggressive approach to business negotiations. When negotiating, it is advisable to speak softly and with little emotional weight. Mirror your counterparts' method of communication.
You can expect bargaining during negotiations. However, do not use high-pressure tactics, as this will backfire.
Lastly, personal relationships play a significant role in Indonesian business culture. Indonesians would much rather do business with individuals instead of entities. Thus establishing trust and good relationship is crucial. In addition, you can expect questions about your family and personal life. Indonesians see getting to know you on a more personal level as a sign of respect.
At business meals, wait for your host to invite you to drink or eat before you begin helping yourself. It is also important to note that you should not offer food to your Muslim counterparts during the Islamic month of fasting, Ramadan.
It is interesting to note that Indonesia offers a wide variety of cuisine from around the world, ranging from fine dining in Jakarta to small food stalls.
While it is important to arrive on time for meetings, it is also advisable to be flexible with your time planning, as it is not uncommon for meetings to start late in Indonesia. Foreign visitors are expected to dress smartly for business meetings, so come in a suit or traditional shirts (batik) like those shown in the photo below.
When greeting your counterparts, it is customary to greet people in order of their seniority. This is similar to China.
Good harmony and relations are considered the most important components of successful business in Indonesia. Maintaining a fun and pleasant atmosphere is prioritized over urgency and productivity.
As a result of harmony and maintaining good relations, negotiations and deal-making can take a longer time in Indonesia. This is because consensus-building and maintaining harmony are prioritized over quick decisions. Expect to set aside a longer timeline for deals to go through, and expect to put in more effort in maintaining relations.
As mentioned above, patience is crucial when doing business in Indonesia, as negotiations take time. Compromise is key, and everyone is expected to give a little to reach an agreement.
Enter into deal-making once you have established a strong local bond with your business counterpart. Trust and strong relationships are essential for successful business dealings in Indonesia.
Lastly, there are some communication nuances to note. For example, 'yes' may not always mean 'yes' in Indonesian culture. There are many ways to say 'yes' and 'no' in Bahasa Indonesia, so understanding the nuances of language is important in negotiations.
There are some other considerations that might be helpful for your business negotiations in Indonesia. First, it is important to note that Indonesian business culture is hierarchical based on age and position. Leadership is often paternalistic, with the oldest person usually leading discussions.
Second, consensus is sought from everyone before a decision is made, in order to maintain harmony and respect within the group. When making a deal, it is important to convince everyone on the other side of the table.
Third and last, on the Corruption Perception Index (2023), Indonesia ranks 115th out of 180 countries, with a score of 34 out of 100. This perception suggests that the country's public sector is somewhat corrupt. Take this into consideration when doing business in Indonesia.
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