Relationship Building in Indonesian Business Culture

Doing Business in Indonesia: Why Relationship Building Is Critical for Success

Ask a business with a successful presence in Indonesia the secret of their success, it’s unlikely they would cite their amazing product or service as the reason.

Although a great product or service is an essential factor in business success for any company expanding overseas, the essential ingredient for success in Indonesia lies firmly in the ability to navigate and harness Indonesian culture.

If you don’t understand the culture in Indonesia, then you’re unlikely to even get a foot in the door. The value that Indonesians place on relationships is an essential part of Indonesian business culture.

Whether you’re in Indonesia to negotiate a contract, discuss a partnership, deliver services, or sell your product, it’s vital that you recognise the importance of understanding the culture.

If you’re visiting Indonesia, it’s a good idea to learn about local customs and etiquette. Photo by Farhan Abas on Unsplash

Indonesian Business Culture: A Relationship-Driven Approach to Trust and Partnerships

Indonesia is very much a relationship-driven culture and trust between people is an important prerequisite to getting anything done.

This means that the business world in Indonesia can play out quite differently from the business world in Western cultures.

In Western cultures, people tend to place trust in agreements and contracts. As long as individuals are considered able to fulfil agreements, then it’s generally accepted that people don’t have to like each other. As security, if people don’t fulfil their contract, then the contract can be withdrawn.

In Indonesia, however, the absence of a relationship means that Indonesians are unlikely to progress things further.

To illustrate this, consider a group of individuals who have flown from the USA to Indonesia to negotiate a contract. They arrive the day before, complete the negotiation the following day and then fly home that evening.

These individuals are highly unlikely to win the contract as they have failed to secure a trusting relationship beforehand. The absence of a personal relationship means that these individuals become nothing more than abstract entities.

Had they stayed long enough to establish positive connections, no doubt they would have been accepted by their Indonesian counterparts and considered for potential partnership.

Clearly, however, trust alone won’t cut the mustard in Indonesia (which is where the great product or service comes into play), but at the very least, the American business staff would have gained credibility and been afforded the opportunity to promote their offering.

To help you avoid making similar mistakes, we’ve outlined 4 key actions to ensure you make a good impression and maximise your business outputs.

What’s it like doing business in Indonesia? In Indonesian work culture, the group takes priority over the individual, meaning decisions, communication, and relationships are shaped by a focus on harmony, consensus, and maintaining collective trust.

4 Key Strategies for Building Strong Business Relationships in Indonesia

1. Invest Time in Building Trust and Personal Relationships

It is critical to build relationships at both a personal and professional level.

As such, if you’re visiting Indonesia for a meeting, then arrive a few days beforehand and invite your counterparts out for dinner. Use this time to talk about non-business subjects, as this will demonstrate that you value your relationship with them as individuals. In the early stages, it’s good to avoid talking about business at all if possible.

2. Plan and Budget for Relationship-Focused Business Visits

Add plenty of flexibility in your itinerary for social meetings and visits, and allow for the extra costs this will involve by way of accommodation and expenses.

Make your Indonesian counterparts aware in advance that you are keen to get to know them and that you would like to arrange a dinner prior to any meetings. Ask them if there’s anyone else you should be inviting, and if so, request that they extend the invitation on your behalf.
If you’re not familiar with the area, then ask where they would suggest meeting so that you can plan accordingly. Be aware that as the host, you should also pay the restaurant bill.

3. Maintain Relationships Through Virtual Communication

Although face-to-face contact yields positive outcomes more quickly, if you’re unable to visit Indonesia, then you should arrange regular video conference meetings instead.

Emails and phone calls are too impersonal, so avoid using these channels when getting to know people.

If you’ve just returned from a visit to Indonesia, then arrange video conferences upon your return. Your initial video conference should focus on simply reconnecting and thanking them for taking the time to meet you. This method should then be used to discuss any follow-up topics in preference to phone or email.

4. Build Rapport Through Openness and Personal Connection

The more open and personal you are with Indonesians, the more they will warm to you and open up in return.

Try not to be too private when it comes to talking about your personal life – people want to know about others, and learning about their family, education, background, likes, and dislikes is all part of this. Avoid taboo subjects such as politics, sharia law, human rights, religion and gender relations.

If you’re from a culture where relationships are not so important, then this may feel strange at first. However, in time, you’ll find that this arrangement yields some great benefits. You may even find you start incorporating elements of this approach when you return to your home country!

Main image by IRSA Indonesia (CC BY 2.0)