Decolonisation and the organisation of the international workforce: Dutch multinationals in Indonesia, 1945–1967

Abstract

This article deals with one particular aspect of economic decolonisation: the inclusion of local managers in the companies of the former colonial powers, in this case, the promotion of Indonesians to managerial and supervisory positions in Dutch multinationals. The Indonesian government blamed Dutch companies for being too slow in training and promoting local managers, and Dutch historiography agreed with that judgement. The replacement of expatriates by local managers, however, should be considered in the broader context of the diverse functions of expatriates. This article argues that for multinationals the use of expatriates is essential for creating a social network that enables knowledge transfer and control. The local subsidiaries profited from the transfer of knowledge and expertise; becoming part of that international network through exchange of staff is more important than getting rid of all expatriates.

Decolonization of Petroleum Education and Training in the Indonesian Oil Industry, 1950-1968

“…Indonesianization also resulted in the shift of employment from Chinese and Indo-Europeans to indigenous Indonesians. Some have shown this to be the case with companies in other sectors as well (Lindblad, 2008: 161-162;Sluyterman, 2020Sluyterman, : 1192Sluyterman, -1194. In his memoir, RIJ Soetopo, for instance, may have recorded this as a personal friction with his Chinese-Indonesian supervisors (Hanan Akib, 2012: 54-57).…”

“…Keetie Sluyterman has pointed out that the localization of subsidiaries of multination firms allowed for a new relationship to be created between expatriates as 'essential for creating a social network that enables knowledge transfer and control. For local subsidiaries, becoming part of that international network through exchange of staff could be more important than getting rid of all the staffs" (Sluyterman, 2020(Sluyterman, : 1183 As Lindblad has shown, Dutch companies were less willing to undergo Indonesianization than companies from other countries like the US and Britain (Lindblad, 2008: 175). Even then, most of the Indonesianization occured at the lower levels, with upper management still in the hands of foreign expatriates;however, the petroleum industry was somewhat different in this regard.…”

A Blessing and a Curse: Institutional Embeddedness of Longstanding MNE Subsidiaries in Emerging Markets

“…As one expatriate director stated: The underlying assumptions, beliefs, and values are deep-rooted in not only the local environment but also the MNEs themselves, reflecting their identity and purpose (Thornton and Ocasio, 1999). Dutch MNEs in the past relied on expatriate managers (Sluyterman, 2017), and while this has changed more recently, partly due to regulations, expatriates continued to struggle to fully understand and empathize with local beliefs and norms, as evidenced in the following quote by HBC's Country Director:…”

“…While Dutch MNEs have, in the past, been criticized for a lack of inclusion in their Indonesian subsidiaries, such as failing to promote local managers (Sluyterman, 2017), nearly all of the case study MNEs' staff are Indonesian, including most of their most senior managers and board members. While UGG and HBC have appointed an Indonesian country director (CEO) in the past, expatriates (from India and Malaysia respectively), were at the head of the firms during the data collection period.…”

“…However, post‐independence, Dutch assets were nationalized, and expatriates sent home. In the 1960s, the Indonesian government softened its position, opening up to Dutch companies, partly because the Government did not have the technical capabilities to operate the factories (Sluyterman, 2017). However, Indonesia’s independence gave rise to new challenges for doing business in Indonesia, where an ‘Indonesianization’ movement (i.e., decolonization, White, 2012) aims to wrest control from Dutch firms and develop indigenous firms.…”