Market Organization in Indonesia: Javanese and Chinese Family Business in the Jamu Industry

Abstract

In Southeast Asia, people of Chinese origin have a remarkably strong presence in trade and industry. The main question addressed in this paper is whether the organization of inter-firm linkages in the Indonesian herbal medicine (jamu) industry resemble characteristics of the Chinese family business or whether, in this industry, a distinct mode of market organization has developed. The business systems approach forms the basis of the analytical framework which is comprised of four market organization characteristics and five key social institutions. In the Indonesian national context, a number of mutually connected social institutions constitute a favourable environment for the development of the Chinese family business system. Results from case studies of eight large and medium-sized jamu firms owned by either Indonesian Chinese or indigenous business people show that, in many respects, the market organization in the Indonesian jamu industry reflects Chinese family business characteristics. However, a distinct Javanese characteristic was also found. The jamu firms display strong paternalistic behaviour towards their suppliers and customers, which can be linked to Javanese authority relations known as bapakism and the high level of collectivism within micro-societies in Indonesia.

Management controls in family-owned businesses (FOBs): A case study of an Indonesian family-owned University

“…This is not surprising as prior studies (Rademakers, 1998;Geertz, 1972) The importance of family ties and hierarchy within the Indonesian context especially Javanese has also been identified by other studies (Rademakers, 1998;Dean, 2001 From the interview results it was also found that while some form of conflict exists among certain officials, this is not shown on the surface due to the need to maintain apparent peace with each other especially with senior members of institution/society.…”

“…In a recent study, Carney and Gedajlovic (2002) also However, recent years have seen the emergence of indigenous Indonesian Javanese as FOB entrepreneurs. As argued by Rademakers (1998), the extant literature on FOBs in South East Asia (including Indonesia) is dominated by the 'Chinese family business' (CFB) management system which has been found to be distinct from other similar business systems such as the Korean chaebol and the Japanese keiretsu and sogo sosha (see also Whitley 1992). Little empirical evidence is therefore available on managerial issues in indigenous Indonesian FOBs.…”

“…This paper draws heavily on cultural perspectives of control, given the importance of various cultural and societal values on controls in LDCs' enterprises (Gray, 1988;Rademakers, 1998;Dean, 2001;Wickramasinghe and Hopper, 2004;Pourjalali and Meek, 1995;Lau and Tan, 1998;Brewer, 1998;Harrison et al, 1994). It was felt that management control processes were best studied by applying cultural perspectives (Wickramasinghe and Hopper, 2004;Pourjalali and Meek, 1995) as controls in LDCs, which operate in a complex cultural environment where owner-officials realise their ends using a series of informal processes on the shop floor and elsewhere (Uddin and Hopper, 2001).…”

Dimensions of the Javanese culture and the role of Parents in instilling values in creative industry entrepreneurship

“…Those who have a higher position must be respected, while the higher position must have a fatherly nature or bapakism or motherhood nature for the lower position. Bapakism is a form of paternalistic relationship between leaders and followers (14). Bapakism is a term that means an ideal father who is highly respected, which has the charisma and the duty to take care of the surrounding community member.…”

Pengaruh Budaya Bapakism Dan Kematangan Manajemen Portofolio Teknologi Informasi (Mpti) Terhadap Kinerja Perusahan

“…Hal ini tidak mengejutkan karena penelitian sebelumnya (Rademakers, 1998;Geertz, 1972) telah mengidentifikasi sentralisasi otoritas sebagai karakteristik kunci dari masyarakat Jawa.…”