Managing a complex environment — Social cultural perspectives the case of Indonesia

Abstract

The study explores social institutions of Chinese-managed organisations in Indonesia as products of their social-cultural values and historical trajectory developments using information (knowledge) management perspective. For comparison analysis, Chinese managed organisations are compared to Javanese-managed organisations as the latter being the dominant cultural group in the country. This study is approached based on the idea that agents' social cultural values have impacts on their managerial values and preferences as well as business practices, which are reflected in their social institutions as strategies in dealing with complexity of information processing activities – as proposed by Boisot and Child (1999). I find this concept interesting and very useful in enhancing our understanding of various strategies in managing a complex environment that arises out of social interactions among agents of different social cultural backgrounds. However, the concept has never been empirically studied in the Indonesian context. Therefore, a study was carried out in Jakarta in July 2004 using questionnaire as the main survey instrument. A sample of Indonesian managers (n=334) was selected representing different social-ethnic groups, professions, and organisations in Indonesia, and 66.17% (n=221) questionnaire was returned. Data is processed by SPSS (Statistical Package for the Social Sciences) and analysed using exploratory factor analysis to discover the main constructs or important dimensions of managerial values and business practices in Chinese and Javanese-managed organisations. Because there was no instrument available that tap the exact same construct needed to be measured, the questionnaire used in this study was constructed based on a similar instrument developed by Adam G. and Vernon H. (2004) on business cultures and practices in Thailand with some modifications. The study shows that while Chinese tend to engage in clan/network social institution - as suggested by Boisot and Child (1999); Javanese tend to engage in fief social institution as their strategies in dealing with a complex social environment. This suggests Chinese and Javanese managers have different strategies in managing the complexity of information (knowledge) exchange, which arises in social interactions. This may be used to explain why Chinese in Indonesia tend to be more successful economically. In general, statistical findings did not appear to show significant results. Both Chinese managed and Javanese-managed organisations share similar characteristics in almost very aspect of their managerial values and preferences and business practices. The only factor that has statistical significant difference is factor: "Prestige and security,' suggesting that this variable is more important for Javanese than Chinese mana gers (for example, 'to work in an organisation that is large, well-known and prestigious'). However, the discovery of similar cultural issues between the two social cultural groups also provides an important unexpected finding for future studies. Hence, the idea of social institutions as products of social cultural values helps us understand why managers of different social cultural values have different organisational strategies. Hopefully, the study may also be helpful for enhancing our understanding on business practices in the socio-cultural perspectives that prevail in Indonesia as such that it may be used for future research to build dimensionality of business practices in different contexts.