Development policy for SME's and entrepreneur's cross cultural profile : a cross national study on development policy and cross cultural study on SME's

DEYELOPMENT POLICY FOR SII,IE'S AND ENTREPRENE{M.'S CROSS
CULTURAL PR.OFILE
a Cross National Study on Ilevelopment Policy and Cross Cultural
Study on .SIVIE's

Oleh

Dr.Ir. Eddy Soeryanto Soegoto

Young San Universiry
South Korea
2010

DEVELOPMENT ROLICT FOR S}[E'S AITI} EHTNEPRET{EUR'S CN(}SS
CT'LTI]RAL PROFII,E
e CtGo N*th*I Studf on l}tr@cntFdfuy md Crocp erhural
Study otr SME'o

This Paper Has Prescuted

rtYourg


Son University

South l(orco on Norvembcr 1I 2010

By
Dr. Ir. Eddy Socryaoto Socgoto

Approved by

Prof. DriJ+DaeSik
Head of Malaysia - Indonesia StudyDepartement

DEVELOPMENT FOLICT FOR S}IE'S ANI} W'S
CR(}SS
CT'LTT'RAL PROFII,E
a CrGc Nrtbnd Studf m D@ptntFoliry red Crcer Culturrl
Study oa SME'o

This Paper Has Preseuted atYoung Sar University

South Korno or No'vemher 11 2010

By
Dr. Ir. Edry $oeryaato Socgoto

Approved by

Prtf. DrnJcDaeSik
Head of Malaysia - Indonesia StudyDepartement

ABSTRACT

DE\TELOPMENT POLICY FOR SME'S AI\ID ENTREPREI\IEUR'S
CROSS C{ILTURAL PROFILE
a Cross National Study on Ilevelopment Policy and Cross Cultural
Study on SME's

By

Dr.Ir. Eddy


Soeryanto Soegoto

Campared ta South Korea, the camparative study of Small and Medium
Enterprise's development policy in former times in Indonesia did not have any
vision about the position of Small and Medium Enterprise in national economie
organizational structure, and if being compared to Malaysia, there was no
native's proprietary development plan in national investment portion in
Indonesia.
Comparative study between Indo*esian m$nsger-en*eperuur (native) and
Tionghoa (non-native) in Bandung, Banjarmasin, and Palembang in terms of
Meaning of Working found that there was no dffirence between two groups
especially in Working Centralization, Income Oriented, ond Expressive Working
Aspect, and suggests thct the opinion that there is difference in working
motivation between native enffepeneur snd non native entrepeneur is
unacceptable. On the contrar!, the low level of Obligatian Oriented and
Dependancy Orineted and the high level of Learning Oriented of non-native
group can be referable to formulate Native Entrepeneur Development Palicy
which based on Business Strategt Learning and Learning Cukwe Creation.
The condition af Small Enterprise in Beijing, Hongzhou-Suzhau and

Shanghai indicotes that great condition of low infrastructure for investment,
excellent planning of urban area and husiness area can ereate composure in
running a business , business agresiveness privacy in area, gre*t condition of
police structure ond free of tmlegal livies, and especially privacy in business
strategt by professional salesmanship way. The high level of sales bargaining
practice has already supported small and mendium enteffise to be as good as
big enterprise.
Homogenity of tutive group in marginal leyel ard no*native group in
very high level suggest that the Small and Medium Enterprise Development Policy
must have variation, hmting looked at "gap chsracteristics" on each homogen
graup. Mix educational poth of notive and non-native Small ond Medium
Enterprise must be done for learning process and integrated path, a least by joint
Jield job visit system.

Keywards

:

Indonesian Small and fuIedium Enterprise Develapment Plan,
Business Strategt Learning Law Infrastructure, Economic Area

Plan in Urban Area, Professionol Salesmanship, Nativa and NonNcitive Mix Training and Education Program.

2

L

Introductian

The issues Small and Medium Enterprise development can't
dischargefrom the government policies, education system and the entire ways
undertalrer behave. Study aboard hss been

&ne with consideration, give

a

vision, how we ean deal with the other country experiences in improving
Small and Medium Enterprise. What we takc as on entitlement thing, may be

not or holf way to makc it perfect. Whot we take as a false th@, may be

happens the counter eondition. In a researeh case, there\e so called error

one snd

enor two, we takc.the entitlement thing as the false one, and

tke

Jblse thing ss the entitlement one. For example in employees selection, we
reject the competent and potential employee (as error oru), and we accept the
employee who have a loek in Tntentials (as

etor two).

The comporative studies enable as to hsve a different point ofview,

a dffirent paradigm, different assumptions, and we consider it as creative
mindset which is really acquired in the enterprise world. The same mindset

perhaps create meclwnistic enterprise, but the litersl mindset create an era-


changing enterprise or even ereste an enterprise that hsve no similor with
what had been create before. Planning way of small and medium enterprise

which rest on internal or closed system without see the experience and the
other people world, and so does the pxt statie experience enterprise, it

doesn't make ony chance

to think creattve. An approach

and flexible

philosophy makc it possible with wider planning. For example, if in Jakarta
there's a stneet called "Mangga Dua Street" (means two mangoes) ifwe visit
and see in Shenzhen there's a protocol street planted by mangoes tree. What

is the philosoplry beyond this de&tctive

experieneeT China which has a


billion populations can plant the mango trees on the protocol street, can
Indonesia do the same? What is tlrc meaning of incapability af Indonesia? As

we acquainted "The law don't work well" a little or a big violation from
individual ar groxry ean't

be

finished by taws- The spectatars' af PSSI match

disturbances which mastly make damage on people's belongings never solved

by law- The lows need to improve effectively- The law aspects on business
reflected on the Shaolin Temple's effort whieh

DnItEd$

Soeryanto Soegolo


Lmr*

will give lsw actions to 80

of Indonaia Computer Univercity

L

Introduetion

The issues Small and Medium Enterprise development can't
dischargefrom the government policies, education system and the entire ways
undertalrer behwe. Stufu aboard has been done with consideration, give a

vision, how we ean deal with the othEr counry experiences in improving
Small and Medium Enterprise. What we take as an entitlement th@, may be

not or half way to make it pedect. What we take as a false thing, may be
happens the counter condition


In a researeh case, there're so called error

one and etror two, we tak* the entitlement thing as the false ane, and the

lalse thing as the entitlement one. For exmnple in employees selection,

we

reject the competent and patential emplayee (as error one), andwe accept the
employee who hove a laek in potentials (as ercor two).
The camparative studies ensble us to hsve a

dffirmt point ofview,

a different paradigm, different assumptions, and we consider it as creative
mindset which is really acquired in the enterprise world. The same mindset

perhaps create mechanistic enterprise, but the literal mindset create on eilt-

changing enterprise ar etten create afl entefprise that hove no similar with

what had been create before. Planning way of small and medium enterprise

which rest an internal or elosed system without see the experience and the
other people world, and so does the past static experience enterprise, it

doesn't make any chance
philosoplry make it possible

to think

An approach and flexible
with wider planning. For example, if in Jakarta
creative.

there's a street called "Mangga Dua Street" (means twa mangoes) if we visit
and see in Sheruhen there's a protocol street planted by mangoes tree. What

is the philosophy

beyond this de&rctive experience? China which has a

billion populatio.ns can plant the mango trees on the protocal street, can
Indonesia do the some? What is the meaning of incapability af Indonesia? As

we acquainted "The law don't work well" a little or a big violation from
individual or grsup can't be finished by taws. The spectatars'o/PSSl rnatch
disturbances which mostly makc damage on people's belongings never solved

by law. The lows nced to improve effeetively. The low aspects on business
refiected on ihe Shaalin Temple's effort whieh will give law actions to 80

Dr.InEddy Soeryanto Soegoro Lecturu af ladonaia Conputer Univenity

a

J

Shaolin name users' countries is a huge actians an creative based on the
certainty of low (see the journal of visiting China). The uncertainty of law
which

ffiicts

the copy entitlement in Indonesia because it makes the artist or

art creator frustrated. How far the entrepreneur and the citizen protect their
copyentitlement in Indonesia and abroad? Batikfor example.

Enterprise development related to
(see the

a

conducive business climate

journal af visiting China) which can create IS(N new business

each

day or 55A.000 Wr year with investment about 3 billion Yuan (3, 6 billion

Rupiah). Wbat &bout lfidanes.ia? Informatienfrom Keaenteriaa Kaperasi &

UKM

&

BPS informs that basiness enterprise growth in Indonesia

93 million to 41, 36 million ar increase

I,

43 million.

from

39,

It meons that the

development of business in Indonesia is better thon Chinc. This condition
makes cleor the position of Indonesia, and gives

o legitimoting Small and

Me dium Ent erpr i s e pol icy.

II. Research and Obsemation Small and Medium Enterprise Development
Policy Abroad: Malaysia, Japan, South Korea, Philippine, Indonesia,
Suirs, and China
2.l.Results of Small and llledium Enterprise Obsemation in China
With a background

of "much population" problem and "the wide region"

problem and "problem of communist culture which turn into free trade

culture".

This

following data shows the economic and entrepreneurship in

China:

l)

Flight Annual World Wealth Report which published by Capgemini and

Merril Lynch say that in the end of 2005 in Mainland China existed
236.000 billionoire, increasing 12 percent than last yeor (2004). This
country has turned into the second country afier Japan which in quantity

of billionaire. The report also srys that approximately 7, 7 million of
billionaire rytread all wer the world in the end af 2AA5, wh:ich increasing
7, 5 percent than last year.

2) According to Head af All- China

Federation of In&xtry and Cammerce,

each day I5A0 new private enterprise established in Mainland China with

Dr.hEddy Soeryanto Soqoto Le&tret of lttdoaaia Computer University

4

amount of capital which registered in aII that companies about 3 billion

Yuan (JS$361,45 million). Now China hove 32 million self employed
businessman which reJlected

2, 5 percent of its population

(total

population of China is 1, 28 billion)
3) In the lastfive years, there're 99 China's omtversity students who graduate
Master from Business Administration of Harvard Business School, and 2a

university students will settle their MBA from Harvard Business School in
1991, one

4)

o{them is studsnt froat Sftcttg&ai.

Accarding ta Dep$y af .China Cammerce Ministry entrepreneur from
Taiwon had invested in Mainland China for 62.00a cornpanies with total
actual investment US$ 37,

I billion. The Gwernment of Mainland China

will not change the "fovorable policy" af investar from Taiwan and their
"entitlements af law" will be seeured In other side, China Center
Government had declared that they will not let entrepreneurs from Tatwan

gain a prafit in China Mainland

f

alt the entrepreneurs supporting a

freedom of Taiwan.
5) Shaolin Temple in Henan ts ready

for hard battle to sqve shootin

Kungfu.

This Shaolin Temple had spread the application to 80 countries to register

the shaolin Kungfu Trademark They have inventorying process

the world and there're

lI7

"Shaolin Temple", most

of

all

over

trademarks which use "Shaolin" nsme or

in Australian and Japan. In
Mainland of china alsofound a hundred companies and about 54 kinds of
product which have a netme "Slnolin" from car even to beer- Every one of
them found

them is out of lmowledgably of ShaolinTemple.
6)

More than half internet cafd rental have incame
361, 45) per month. This matter reported,

it

tess

than j000 yuan (JS$

because these internet caJd

rentals have to paid o lot offeesfor much kind af government institutes.

2.2.Resul* af surr,ll add Mediua E*erprire ohservatlon in sourh Kore*

l)

1961 is the first year of Small and Medium Enterprise Development
Planning-in South Korea. The policy is that technologt saphisticotion

of

Small and Medium Enterprise.

Dr.Ir.Eddy Soeryanto Soegoto Lufrtret

af Indonaia Conpater Univenity

5

In

1973 the poticy

of

developing cooperation enterprise established.

Cooperation enterprise aimed at :

a. A business which needs a collaborating of all the business man.
b. A traditional business which generally done by handicrart maker.
3) Established

special bank

for

smull ond medium enterprise beyond

Government General Bank

2.3.

Obsem&ion Worh Orbntatlon

af Smatl and Middk

Entrepreneurc

Culture Crcss in W*t Jwa (Bandung, Sukabumi, Tasikmalaya), South
Sumatra (Palemhand, Sodh Borneo (Bsniarruosin, Baniarharu).
Work CentralitY Abrosd

among them.

low centrality of Britannia (2- 4) about t3o/o. German's centrality high
35% and the low one is 1495. Holland's centrality high i5ok and the

low one is

10%o-

Belgian's centrality high j9% and the low ane is

I0%. (JS's centratity high 4t% ond the low one is

1094. Israel's

centrality high 43% and the low one is *ok. Yugoslavia's centrality
high 54% and the low one is 6"k. And Japan's centrality high 59%
and the low one is 6Yu (MOW InternationolTeam 1997 :

8i:84)

chemical engineers group, followed by teacher, turtile worker, tool

and die mokcrs, unemployed, affice worker, pensioner, university
student, and the lowest oru is
1997

:

pafi- timer- (MOW International

Team

85)

2,3.1. Four Pffierns the Meoning of Work: Abroad Coantry

entitlemint

-

Sanaplc

law abligation)

Dr.InEddy Soeryanto Soqoa Lec*ttet of Indonaia Computer Univenily

6

and abligation)
(MOW International WorkTeam 1997: 187)

2.3.2. Four Patterns the Meaning af Wark (Abroad Cauntry)
Background: Competency and Work Understanding Problem

o

Reported on past that Indonesian wark orientation
The work eentrality is

low

says Boeke

im't like the westerner.

(1993) and cansidered not support

or not match with development pragram (Ka*ioranfutgrat, 2AAl). On a
discussion of dualistic econonry theory Boeke (199i) explain the
characteristie of Indonesimt people are: "...there is almost no oriented on

profit for the East People (Indonesia). Speculative prafrt attracting them,
but these profits haye no regatarity and eontimtity element which identify
of income concept. East industry ide*ifiedwith "doesn't like capital" ond

fund beeause the risk always behind
it"; just a little desire on a finishing and occuraq/, lack of business
quality, even failed on granting stondard and samples, lack of elasticity
"the lingering hatred when invest

supplying, lack

of

a

organizatio4 and indiscipline and lack

of

the

entitlement local specialization. (Baeke, I 99 i)

o

They dedicated

for following "bypcss culfitre" as a work habit whtch

disobey stiptlation and broke the lav, procedure in effort to accomplish
instrumental

o

w ork

goals.

According to opinion that Indonesia isn't suit to support the eeonomy
development, the goyernment suggested to wkely not on speculative by

hang it on aathority capacity of ethnie group in Indanesic. (Boeke, ]993;

Higgins, 1999).
Previotts Research

o

Almost in all studies terminologt of "Indonesian people" cnd "Indonesia
Manager

"

meeffLt Indonesia* Etlmie

(Kwt$araningrat,

2AA1

;

Dananiaya,

2006; Geertz, 1999; Hadisumarta, 1998; Hoefstede, 1982) and Indonesia

'

Ethnic Manager @ananjrya ZAAfi- Indanesian Ethnie entrepreneur
contrasted from hrdonesian non-ethnic enlrepreneur, that ls ethnic

Dr.b.Eddy Soeryaato Soegoa Le*trar of Indonaia Computer Untvenily

7

entrepreneur

and non ethnic entrepreneur (Iionghao or

China

Entrepreneur)

In

several culture cross study, terminologt

of

Indonesia use only for

Indonesian ethnic as an appealfrom other nation. (Hofstede, 1982; Redding

Casey, 1996). For example,

it's identffing thot Indonesian Manager

&

who

work on multinational company found that they having leadership style lower
than other nation. (Redding & Casey, 1996).

In

several studies about economic

terminologt fraft

*

of lrdonesia wrote by foreign writer,

etlmic Indanesia almast alwrys mecrn by Chiruse or

Tionghaa wha live in Indonesia. (Suryadartna, 1996,; Wong, 1998; Gungwu,

tees).

For guarantee the succeed of develapment program where the diffirences of
ethnic snd non ethnic regarded as a source of the dffirences perfarmance
and the ability of these groups, then the government often take a'position to
entrust realizing of economy development programfor the abilities of this non
ethnic group. (Moh. Sadli, 1999).
There are government attentiow to

ftx the way we behwe and ethnic group

oriented of business with a torget: "to educate Indonesians dealing with real
competitive market" (Moh Sadli, 1999)

2. 4.

Purpose of Researching

o

Studying: how

far

index the meaning of work (work centrality, work norm,

work output) manager/ ethnic entrepreneur differ than non ethnic
entrepreneur?

o

Studying: haw
entrepreneur

Managerial

far

dffir

the matngerial

job

- fit of the monoger/ ethnic

than non ethnic entrepreneur?

Fit
between emplayee qaalification witk requbements of managerial

'

(Yan der Yen and

w

ork

Druin). Related with situation factar of business

rtrategt, and attached with the other business aspects, imbalance

Dnb.Eddy Soeryaalo Soctolo Luturer of Indonaia Computer Universily

8

score can be mt important measurements

of

managerial

job fit

(Leontiades, 1993)

stratification measurement from eoch managerial worker group.
(Wanous, 1974; Lawler, 1987). Imbalance score on a general studies,
the meaning of work measured in T

of work which

-

Score

from Index. The meaning

from employee's hope and their contexl of
work. It expected the ratio of one mattagerial group with the other
eotmted

could reveal eaeh prafiIesfrom grot*p, the

ffirences and the similar

between two groups.

il[.

Methadologt

distributed adequately between Chins's Manager and Indonesia, they

work in business environment in three big cities, Bandung,
Banjarmasin, and Palembang. They ore disordcred cltutery from
business list in Industry and Commeree Department. Indexes the
meaning of works counted

normative entitlement

for gaining work

(EW,

centrality point (WC),

normative obligation

for

public

advantage, economy functions, (PAY) intrinsic and expressive work
result (IR), and a chance to trained andput towork (OPp)

standard, with total cverage counted on scale 50. To evoluating the
score extent three elarifications madq which are :

o High : T- score > 54
o Medium : T- score :
o Low:T-score