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November 26, 2010

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The Geert Hofstede analysis for Indonesia has very high power distance with offsetting low individualism. This establishes an authoritarian structure where rank and position are very important. With the majority of the population Islamic, religion and faith enter into decision making on a more subjective basis than in most Western cultures.

Indonesia has Power Distance (PDI) as its highest ranking Hofstede Dimension at 78. The high Power Distance (PDI) is indicative of a high level of inequality of power and wealth within the society. This condition is not necessarily forced upon the population, but rather accepted by the society as part of their cultural heritage. The average Power Distance for the greater Asian countries is 71.

The second highest Hofstede ranking for Indonesia is Uncertainty Avoidance (UAI) at 48, compared to the greater Asian average of 58 and a world average of 64. This reflects a more moderated influence of this Dimension within the Indonesian society. Generally, a high Uncertainty Avoidance (UAI) indicates the society’s low level of tolerance for uncertainty. In an effort to minimize or reduce this level of uncertainty, strict rules, laws, policies, and regulations are adopted and implemented. The ultimate goal of this population is to control everything in order to eliminate or avoid the unexpected. As a result of this high Uncertainty Avoidance characteristic, the society does not readily accept change and is very risk adverse.

Indonesia has one of the lowest world rankings for Individualism with a 14, compared to the greater Asian rank of 23, and world rank of 43. The score on this Dimension indicates the Indonesian society is Collectivist as compared to Individualist. This is manifest in a close long-term commitment to the member 'group', is that a family, extended family, or extended relationships. Loyalty in a collectivist culture is paramount, and over-rides most other societal rules and regulations. The society fosters strong relationships where everyone takes responsibility for fellow members of their group.

Indonesia has the largest Muslim population of any country in the World with 88% of their population practicing the Muslim faith.

The combination of these two high scores (UAI) and (PDI) create societies that are highly rule-oriented with laws, rules, regulations, and controls in order to reduce the amount of uncertainty, while inequalities of power and wealth have been allowed to grow within the society. These cultures are more likely to follow a caste system that does not allow significant upward mobility of its citizens.

When these two Dimensions are combined, it creates a situation where leaders have virtually ultimate power and authority, and the rules, laws and regulations developed by those in power, reinforce their own leadership and control. It is not unusual for new leadership to arise from armed insurrection – the ultimate power, rather than from diplomatic or democratic chang

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