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Intercultural management is an emerging but increasingly important area of study. Intercultural management are on work forces that function in different cultural backgrounds. These differences can be either ‘external’, where an organization operates across national and ethnic cultures, or ‘internal’, where an organization operates across company differences, branches or regions. Cultures express different values and priorities when they make and implement decisions. These values influence work relationships, whether between superior and subordinate, peers, international joint venture partners, managers in headquarters and subsidiaries, and others. Intercultural Management subject is extremely important because of the cultural diversity and ethnic that exists within the organisation today. Specifically, with regard to global organisations, it try to settle the unevenness between global and local concerns by proposing a framework that combines a new understanding of culture with a classical leadership approach. It is also about accommodating a range of structural and behavioural dimensions that address different facets of organizational functioning. Intercultural management is expensive, but also give away a high return on investment. The objective is to achieve more effective cross-cultural practice. In this assignment, students of Intercultural Management are required to experience a Field Trip to Indonesia, Medan. Students are expected to carry culture analysis and findings on the problems that are asked to fulfil the requirement of this module and prepared a report in the end.
2.0 Background of Country Visited, Indonesia
Indonesia is the fourth largest country in the world by number of population which expanse between the Indian and Pacific Oceans with thousands island scattered across. Its closest neighbours are the new country of East Timor which formerly a part of Indonesia, Papua New Guinea and Malaysia. It is an archipelago country, made up of 17,508 islands with a land area of 1,905 thousand square kilometres. It has 33 provinces populated by 242 million people. From the western tip of Sumatra to the eastern edge of Papua, it runs along the equator for 5000km. Indonesia has been an independent republic for more than fifty years and its capital city is Jakarta. Indonesia’s peoples are regional interests, diverse and cultural elements differ widely.
2.1 History of Indonesia
Indonesian history, hominid fossils was found by Eugene Dubois in 1809 near Trinil village, East Java. Human immigration occurred 3000 BC. These immigrants are either came from the Pacific islands or southern China and brought their language, Austronesia with them. Since they arrived in a small group and set up around the coast, Austronesia language was quickly diversified with distant descendant of Java Man. However, Bahasa Indonesia is the national language of Indonesia. At the 5th century, Hinduism first came to Indonesia with the advent of Indian merchants as on purpose act of preaching by the Brahmans. By this time Indonesia’s trading partners was southern China, hence the influence of Buddhism also started to take part. In the 11th century, merchants brought Islam in. By the time, there was no centre of Indonesian Islamic culture and this leads to weakness when the Dutch arrived. Dutch East India Company ruled Indonesia from 1602 to 1799 and stayed until 1942 as a Dutch colony. Before the Dutch returned to claim their colonies from 1942-1945, the Japanese occupied the islands. Sukarno declared independence and was appointed as president after the surrender of Japanese in August 1945.
2.2 Indonesia’s Political System
Republic of Indonesia came into existence in 1945 followed by the federal government under the United Republic of Indonesia. Based on the 1945 constitution, it then returned to the ‘Unitary State of the Republic of Indonesia’. The 1945 constitution controls responsibilities and position of state officials, duties, their authorities and relationships between government institutions. (executive, legislative and judicial). The People’s Consultative Assembly (MPR), being the highest state institution promulgates the constitution, decide state policy guidelines and appoint or dismiss the president and vice president. Direction of the government, laws and drafts regulations is monitored by The House of Representatives (DPR). Position of other high-level state institutions, including the Supreme Court and the House of Representatives are occupied by the president, who is also the Head of State and Head of Government. The President also carries out the mandate of the MPR, implementing the state policy guidelines, and appointed ministers and heads of non-ministry with the ministry (the Attorney General, Police and Armed Forces) that assist in the implementation of these tasks. The Supreme Court is the judicial branch of the State around the executive and legislative branches. Government’s finances are examined by The State Audit Board. The State Audit Board is reported to the People’s Legislative Assembly, the body that approves the inspected Expenditure and State Income. On matters related to issues of economic, political, the military and socio-cultural, The Supreme Advisory Council provides advice to the President on request.
2.3 Indonesia’s Economic
With inflation reducing, solid growth and falling unemployment, Indonesia is currently enjoying positive economic conditions. Indonesia has recently become more recognized for providing investment opportunities as there has been a lot of foreign interest. Due to the rich deposits of natural resources, Indonesia has become a major beneficiary of the strong growth in China and other developing countries. This helps the strong economic growth through foreign investment and international competitiveness. Inflationary pressures continue to be a problem for Indonesia although the rate of growth has been strong, driven by higher food and utilities including fuel for the country’s domestic demand grows rapidly. Indonesia’s central bank (Bank Indonesia) to take action to help restrain inflation as it began to pose a threat to economic growth. Through Monetary policy tightening, inflation has been reduced to a more manageable rate. The unemployment rate in Indonesia has reduced since 2005-2006 in line with the strong growth of the economy. Corruption continues to be a major problem for the Indonesian economy which can have the effect of distribution. By reducing economic growth, this affects income inequality and scarcity.
2.4 Infrastructure and Technological Information
Dial-up service over noisy line is commonly used to access the Internet. Most of these wireless access points are in cities. Wireless infrastructure may be away to go for deploying Internet for rural, under-served, poor Indonesian neighbourhood. However, issues in rural areas would not only telecommunication or Internet access technology, it is more on the demand, people, social, cultural side as well as the higher stumbling block in the regulatory framework. Need on information and knowledge is virtually non-existence in such areas. The major problem is mainly lack of content written in Indonesian. Speak-and listen is much common way to communicate in Indonesian culture as compared to read and- write.
Indonesia, with number of 234 million populations, is the world’s fourth most populated country. There are more than 300 people per square mile (160 per square km), which four time more than the population in the United States. The rate of population grow in Indonesia is around 1.5% per year which means this country will have 282 million population by the year 2025 and more than 315 million population by the year 2050. About 40 % of the population is urban while 45% of the population is engaged in agriculture.
In Indonesia most islands can be considered as multiethnic, which large and small groups forming geographical enclaves. In ethnic areas, arguments between members of different ethnic groups can be resolved by either the leader or the two groups, by feud or by the courts. In many regions with settled populations, a customary settlement is honoured over a court one, and many rural areas are peaceful havens.
There are over 650 dialects and languages are spoken in Indonesia. Since they lived isolated from one and another, unique cultures are developed different islands. However, they local languanges are Sundanese, Javanese, Balinese, Sasak are still being used in some other parts although Bahasa Indonesia is known as the national language. Bahasa Indonesia is a variation of the Malay language. Dutch and English are also often used, this is because Indonesia was a colony of Dutch and English where this both language has became the international language of business during that time.
Indonesia has a largest Muslim population practicing Islam. Besides Islam, Protestants, Catholics, Hindus, and Buddhists are also practiced. Form hybrid religious practices, Islam have mixed with traditions and local customs. A Javanese Muslim from rural may go the mosque to pray but later on pray at the grace of local Catholic saint. Since the 1500s, Christianity has already been practised. It was then influenced by the Protestant and Roman Catholic with arrival of Portuguese and Dutch. Buddhism has a long history in Indonesia since the Srivijaya dynasty and it lasted from the 7th-14th century. In Indonesia, Hinduism is the oldest religion. The Hindus lived at Bali, Hinduism came from India has been greatly adapted by Indonesians to fit it ancestral practices, animist and local.
2.5.4 Ethnic/Culture Groups
More than 500 different ethnic groups live in this country. In North Sumatera ethnic groups are the Malay, the Sudanese, the Acehnese, the Bataks, are the big majority of the local population. Migration, to the North Sumatra to seek fortune has given these people a lot of the region’s agricultural and commercial activities. Largest group of ethnic is The Javanese, followed by followed by Sundanese, and the Malays. The Javanese are given named after the island on which their culture expands.
2.5.5 Cultural Practices and Tradition
Wayang or shadow theatre is well known because of the Javanese. The Javanese also created Batik. The Sundanese and Javanese somewhat can understand each other with some linguistic connection. The Javanese and the Sudanese are both Muslims. Both cultures, the Sudanese and Javanese perform wooden puppets called wayang goleks. Kendang a local drum of Sundanese provides faster rhythm than the one usually found in Javanese culture. The Batak houses are separated into three levels symbolising a threefold division of the cosmos (upper world, the underworld and the earth). The Toba church are the largest church in Indonesia, they were once obvious and early target for Christian European missionaries. In traditional Batak community, woven fabrics play an important part. The woven fabrics are not only as clothing, but as an important gift in the ritual, which to strengthen the ties that exist between the symbol and the group of related people.
3.1 Common Business/ Economic Activity
Based on my observation, the local people of Medan mostly make a living by opening small businesses. There are dozens of food streets along the roads and hawkers centre around Medan. From Chinese home-cooking style food, to Batak’s grilled dish, to spicy Malay sambal, and tasty Indian curry, the city is definitely a food heaven for locals and tourists. Pajak Ikan Lama is the most famous traditional clothes market sells souvenirs, fabrics, handbags, belts, shirts, pants and local food. It also a local market which located near Dataran Merdeka best known for textiles and batik. In Berastagi, vegetables and fruits market known as the main economic activities of the local people. This area is quite cold in climate and highly fertile which situated between Mount Sibayak and Mount Sinabung. Besides vegetables and fruits, Berastagi is also known for producer of sugar cane, flowers, and rice. Most uneducated local men in Medan earn a living as a becak driver. It is very easy to start a business as a becak driver because becak is a public transport in Medan. Due to large population, the labour cost in Medan is very cheap which leads the local people to starts their own businesses.
3.2 Level of Education/ Job Requirement
The highest educational level in Berastagi and Lake Toba is until Primary. Where else in Medan the highest education level is until middle school (secondary). The Hotel receptionist with a bachelor degree who speaks English stated that her monthly salary is only Rp.2, 000,000. In Lake Toba, we interviewed the captain that drive us Samosir Island. He stated that he is also the staff of Carolina Hotel but does not want state his salary when we asked him. A becak driver usually did not have a proper education and had finished elementary school. They speak bahasa Indonesia and only speaks few words In English. To become a becak driver was one of the limited choices they had to earn. The income of becak drivers is unstable and varies on a daily basis. The monthly income was 600000 Rupiah with 7 hours working daily. Sometimes they earn much money but sometimes they wait for passengers for several days and earn nothing at all. The fees they charge the passengers are moreover negotiable. They do not have any fixed charge for each trip. It very much depends on who uses their services and how good they are in bargaining. At strategic places in cities or towns, people can easily find becak drivers waiting in groups for passengers. Usually they can be found at bus terminals or train stations to serve people who have just got off from trains or buses. We usually get short becak ride for 5000 Rupiah to 10000 Rupiah but more for than 10minutes rides will cost around 15000 Rupiah. Most drivers will charge for 30000 Rupiah for foreigners then will came down to 15000 Rupiah when spoken to in Bahasa Indonesia.
3.3 Taboos/ Disturbing Cultural Practices
It seemed that the King has many warriors and one of the famous warriors would go totally naked when going for wars. For Batak people, showing your genitals is a taboo. The Batak traditionally allowed polygamy, but it didn’t come up very often because the man had to be wealthy enough to support the additional wives and children. After Christian conversion, this practice became taboo. Once again, the Christian answer was given. In reality, tribal people usually have a number of superstitions and rituals associated with death. Some tribes actually relocate the entire village if one person dies. According to Dr. Fernandez, the Batak would burn the house where the dead person had lived, and no one would live in that house again. This superstition had the practical function of preventing the spread of communicable diseases. In certain tribe such as the Batak, raised breeds of dogs and slaughtered them for their meat. This may be for some medicinal purposes benefits attributed to different parts of a dog or as an alternative for other meat. Eating dog meat is usually associated with their culture, who cooks a traditional dog-meat stew. I find this most disturbing cultural practice because in other part the world dogs views as a companion and human’s best friend. It is cruel and disgusting to consume dog’s meat. Apart from cultural practice, it is not acceptable by other groups of people.
3.4 Bargaining and Negotiating
Bargaining is usual in small shops and markets in Medan, Tomok and Berastagi. Bargaining works by asking the price and slowly increases the offer until a compromise is reached. We bargain for everything in here. It is fine to say no, or to ignore the seller. But, we only bargain when we really want to buy something. With so many shops competing, it is easy to find the good price. The locals usually speak in quiet, gentle tones. However, this only reflects their politeness and respect for others. Because being friendly and saving face are so important in this culture, communication is generally very indirect. The Indonesian usually prefers to do business with others who treat them with respect and genuinely, it is important to demonstrate similar behaviours. Causing embarrassment to another person may cause a loss of face for all parties involved and can be disastrous for business negotiations Building lasting and trusting personal relationships is therefore critically important to most Indonesians, who expect to establish strong bonds prior to closing any deals. The large population in Medan caused traffic jam. We really feel impressed on how the drivers negotiate and tolerate among themselves when they uses the road. They will normally hon to let other drivers to know that they want to go other side or change the lane.
3.5 Cultural Implication on Advertisement
Religions affect consumption behaviours and the purchase pattern. A high level of familiarity with the local culture is the significant impact on the effectiveness of marketing strategies. One of the television advertisements that I go through is regarding McDonalds’ Delivery. (http://www.youtube.com/watch?v=Uxv73s6YQ88) The advertisement is about young man wanted to take his car to buy dinner/ supper. But his car tyre got punctured, so he decided to get some satay at the nearby street. When he went there, the satay man says he sold off the satays. In the end, he ended up calling for Mc Delivery. From this, I can see that the Mc Delivery advertisement is connected to their local preferences. Satay is one of their local food so the advertisement appealing to their taste. McDonalds in Indonesia now has McSatay, Mc Rice where it’s known that Indonesia basic food is rice served with egg. McDonals in Indonesia does not offer pork burger as most of the population are Muslims. One of the outdoor advertisements that I came across is a politician poster behind one of the becak that we took. Since only the low income group of people who will frequently take the becak, the advertisement of politician figure will appeal into local people of needs for unity on establishment of peace in spite of political. It also makes them think logical on values such as righteousness, justice, freedom, and dignity.
4.1 Power Distance
Indonesia has high power distance which means there are no equivalent rights between power holders and non power holders. The employees in Indonesia are expected to be directed by the employers. Dekker in 2008 stated that power distance is represented by the social position on the basis of the authorities among the most powerful to the least powerful in their communities. It is designed â€‹â€‹by the government in accordance with its own conception of political ideology, socio-economic system, technical development and culture in the various member states. As part of their cultural heritage, Indonesian also has wealth inequalities in society. This is not forced by the population, but accepted by the community as part of their cultural heritage. Managers are respected for their position and control is accepted. In Indonesia, in general seniority and elderly people play important role in the society and community; people usually respect the elderly as well as value their social status in the community.
Indonesia has high collectivism, which means they hold their traditions tightly. Many of Indonesia’s ethnic groups have strong kinship groupings based upon patrilineal, matrilineal, or bilateral descent. The children are committed to their elders. Indonesia family keep their grandparents at home instead sending them to any institution. Their children want their parents’ life easier. Jones in 2007 assumes that this dimension gauge the level of integration of the people in the community as well as capability of the people who work in groups or individually. If one wishes to marry in Indonesia, it is important the men to meet the women’s family. He has to introduce himself to the family of the woman. It is not appropriate having a relationship without notifying the parents of the girl first. Indonesia’s ideas about tolerance, the faith of God, social justice, human, and democracy (5 principles), to reflect the country’s way of life and the basic thinking, such as the reflection of collectivism ideologies are integrated. Loyalty in a collectivist culture is based on social rules and other regulations. The society practices strong relationships where everyone takes responsibility for other members of their group.
4.3 Masculinity and Femininity
Indonesia has both Masculinity and femininity is at the same level. Women have the same rights and opportunities in every aspect such as occupations. According to Chang in 2003 women’s role changing are the factor of economy rapid growth and globalisation in Indonesia. In past women the one should care for children and does the housework where else man the one earn for the family. Now, women are becoming more adapted together with men. The principle of gender equality becomes more comfortable and treats them same as the men. This shows that the Indonesia has a degree of gender differences where both men and women dominate a significant portion of the society and power structure. This leads to women to act more as a man and away from their role as women. In Indonesia although masculinity and femininity are both in same level but men still sometimes have more power. In general, although there are traditional roles for women and men in the society these roles sometimes overlap.
4.4 Uncertainty Avoidance
Uncertainty avoidance explains either people feel secure or comfort with chaos, uncertain events, unstructured situation and risks. It about how Indonesian takes action in order to reach their goal and good inherent balance in controlling situation. Indonesian tends to provide and arrange everything for future events. Harris and Moran in 2006 relate the condition of uncertainty avoidance with Tolerating Ambiguity, which demotes to the ability to react to new, unpredictable situations with little visible discomfort or irritation, different and at times. This explains that there is a strong preference in Indonesia towards separation Javanese culture of external self to internal self. It is common for Indonesian not show anger even though they are really upset, no matter how angry is them they will still be polite. This means maintaining healthy relationship in work place is very important in Indonesia. This shows that the Indonesian people easily accept unstructured situations. Unstructured situation is a new situation, not known surprising, different from usual.
Moreover, Indonesian people in general are also more comfortable with stable and predictable conditions. For example, they prefer to become civil servants rather than to become entrepreneurs although in some cases they prefer to leave everything to God for the situations that they cannot control and manipulate anymore. Another aspect of this element can be viewed at a resolution of conflicts. Direct Communication is the way to solve conflict is usually seen as a threatening and one that they are uncomfortable in. It allows exchange of views without losing face, and since one of the main manifestations of the uncertain Indonesia is to maintain a harmonious appearance in the workplace; intermediary remove uncertainties associated with confrontation.
4.5 Long Term Orientation
Long term orientation is related with people through particular criteria such as obligation, reciprocal, loyalty and honesty. It is more like having good behaviours in relationship. Indonesia seems to be long term oriented. Because the hard work of people today looking forward to a long-term compensation in the Indonesian culture has a strong work ethic. Countries such as Indonesia and the Indonesian tend to have inter-religious views around the world on tolerance features. There is recognition that there are several truths on the seeker because Indonesian people embracing several different religions, such as Islam, Buddhism, Christianity, and Hinduism. The Indonesia are typically not punctual, this because they are long term orientation.
Taylor in 2008 stated with highest numbers of Muslims in the world, combining Power Distance and Unaccepted Avoidance shows the Indonesian community is highly regulation oriented with controls, rules, laws and regulations. Motivating Indonesian Muslim employees would necessitate leader to give an environment of rules and guidelines to decrease uncertainty, show ultimate power and provide rewards to employee based on age, position, and status. Employees of Indonesia can be motivated by Hofstede’s theory. Indonesian workers have a low tolerance for uncertainty, which Depending on tight control as a motivator.
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