UNDERSTANDING CULTURAL VALUES DIFFERENCES AND SIMILARITIES AMONG INDONESIAâS FIVE MAJOR ETHNIC GROUPS - Diponegoro University | Institutional Repository (UNDIP-IR)

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UNDERSTANDING CULTURAL VALUES

DIFFERENCES AND SIMILARITIES AMONG

INDONESIA’S

FIVE MAJOR ETHNIC GROUPS

UNDERGRADUATE THESIS

Submitted as partial requirement to complete Undergraduate Degree Faculty of Economics and Business

Universitas Diponegoro

Submitted by:

FAJAR NUGRAHA SYAHRURAMDHAN NIM. 12010112130154

FACULTY OF ECONOMICS AND BUSINESS

UNIVERSITAS DIPONEGORO

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THESIS APPROVAL

Author Name : Fajar Nugraha Syahruramdhan

Student Number : 12010112130154

Faculty/Department : Economics and Business/Management

Thesis Title : UNDERSTANDING CULTURAL

VALUES DIFFERENCES AND SIMILARITIES AMONG INDONESIA’S FIVE MAJOR ETHNIC GROUPS

Thesis Supervisor : Dr. Suharnomo, S.E., M.Si.

Semarang, January 23, 2017

Thesis Advisor,

Dr. Suharnomo, S.E., M.Si.

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THESIS EXAMINATION APPROVAL

Author Name : Fajar Nugraha Syahruramdhan

Student Number : 12010112130154

Faculty/Department : Economics and Business/Management

Thesis Title : UNDERSTANDING CULTURAL

VALUES DIFFERENCES AND SIMILARITIES AMONG INDONESIA’S FIVE MAJOR ETHNIC GROUPS

has presented and defended in front of the Board of Reviewers on January 31, 2017 for fulfilling the requirement to be accepted.

Board of Reviewers:

1. Dr. Suharnomo, S.E., M.Si. ( )

2. Dr. Fuad Mas’ud, MIR. ( )

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STATEMENT OF THESIS ORIGINALITY

I, the undersigned, do hereby state that thesis entitled: “Understanding

Cultural Values Differences and Similarities among Indonesia’s Five Major

Ethnic Groups” is the result of my own writing. I hereby state that there is no part

or entire writing written by others that I took by copying or imitating in the form of words or symbols that show ideas or opinions or thoughts of other authors that I admitted as if the writing of my own nor is there part or entire writing I copied from or that I took from the writings of other without giving the original author(s) a proper credit.

If I committed otherwise to the aforementioned, regardless of whether it was intentional, I hereby declare to withdraw this thesis which I proposed as my own writing. If later proved that I had taken action to copy or imitate the writings of others as ideas of my own, I will let my diploma which has been granted by the university to be annulled.

Semarang, January 23, 2017 Undersigned,

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MOTTO AND DEDICATION

“Being Black didn’t degrade Bilal and being Arab didn’t save Abu Lahab” – Prophet Muhammad

ﷺ

“We certainly are one single species, and it is becoming morally preferable to say that we are one human race”

– Luigi Luca Cavalli-Sforza

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ACKNOWLEDGMENT

Alhamdulillah. All praise be to Allah Subhanahu wa Ta’ala for the strength, ability, and good health given to me to complete this work.

This thesis becomes a reality with the kind support and help of many individuals. I would like to extend my sincere thanks to all of them.

I would like to express my thanks towards my family for the unconditional love and encouragement which helped me get through this exhaustive yet exciting process. My parents, bapak Darso Rudy Hartono and ibu Oon Saonah, for their endless affection, prayer, and support towards me. To my sisters teh Luthfi and teh Ade, and my brother, Nabil, for bringing joy and happiness in my life. And to the newborn, Arka, thank you for your absolute cuteness! You sure did help me alleviate my stress, boy. Uncle loves ya!

I would like to express my special gratitude and thanks to my advisor, bapak Dr.

Suharnomo S.E., M.Si., for sharing his invaluable knowledge and expertise which

has helped me a lot in my study. This thesis is also possible with his permission to use his data banks.

To the Board of Reviewers, bapak Dr. Fuad Mas’ud, MIR. and ibu Andriyani

S.E., M.M. who have spent their invaluable time to examine and provide me

meaningful feedback for this thesis.

To bapak Kuscahyo, who has introduced me about the beauty of Academic English. I used to be too scared to even think about writing my thesis in English. And..it is now a reality. I hope it is not too bad.

During my study, I have had three different Heads of Management Department, with whom I feel very much thankful for. To bapak Dr.Suharnomo, pak Erman

Denny S.E., M.M., and pak Dr. Harjum S.E., M.M., thank you for providing a

conducive and competitive environment within the Management Department.

To Drs. R. DjokoSampurno, M.M. as my Guardian Lecturer who has provided

the encouragement needed especially when I had a slight drop in my grade. Thank you, Sir.

All lecturers and employees of Faculty of Economics and Business Universitas

Diponegoro for the knowledge and support during my time as a student here.

PT Freeport Indonesia, for the financial support during my study through the

company scholarships. With the fund, I have been able to take Academic English courses during the past two years.

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caring. She was always mad whenever I showed any sign of “relaxing” during these demanding times and it turned out to be a huge help for me. Thank you, mba Isti!

Ajeng and Romi, who have been my best friends during the campus life. Thank

you for the sincere friendship and supporting gestures. I hope to see you guys again soon.

shared their time together with me in this beautiful organization. Thank you, guys. BEM FEB Undip members, Naufal, Taufika, Citra, Astuti, Eko & Iman, Asih,

To ILO Better Work Survey team members, Dr.Harjum, Dr. Mirwan Perdhana

S.E., M.M., Ph.D., mas Ghalih, mas Novan, mba Angela, mba Nabila, and mba

Winda for the exciting experience. I learnt many things from the project as well as

from you. The fact that I enhanced my driving skills during the time of the project is a bonus. Thank you for the trusts given to me.

Academic English Lads, mba Ratna, Maesa, Setiawan, Yudha, Hannina, Havid, thank you for helping me to keep pushing until the end.

To pak Pri and family for providing me warm settlement during my time here in Semarang.

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ABSTRACT

Given the tendency to present Javanese culture as the culture of Indonesia

and worsen by the lack of studies which discuss Indonesia’s cultural variations,

there may be confusion and generalization toward Indonesia’s cultural values. For instance, this study was conducted with the aim of proving that there are cultural

differences among Indonesia’s ethnic groups.

In order to achieve that, Hofstede’s cultural dimensions framework was chosen and his Value Survey Module 1982 (VSM 82) was employed. VSM 82 measures 4 cultural dimensions: Power Distance, Uncertainty Avoidance, Individualism versus Collectivism, and Masculinity versus Femininity with scores normally ranging from 0-100. The respondents of this study were drawn from employees working in paid jobs originating from five major ethnic groups: Javanese, Sundanese, Batak, Minangkabau, and Chinese Indonesian. Quasi-snowballing method was employed in collecting the responses. A total of 699 respondents participated in this study.

The results show that there are significant differences among ethnic groups studied. However, the Javanese dimensions scores show similar results to those of Hofstede. Furthermore, when all the responses were recalculated, the dimensions scores also form similar results to those of Hofstede. These conditions raise the question of whether Hofstede’s samples were indeed drawn from Javanese respondents only or whether a culture majority within a nation is able to represent the national culture of the country. Despite the fact that the VSM 82 was proven to be able to capture significant differences among the ethnic groups studied, such approach lacks deeper insights on how exactly they are different. In this regard, future research is needed with more advanced research design such as conducting in-depth interviews after scoring has been done to gain better insights to the findings.

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ABSTRAK

Dengan adanya kecenderungan untuk menjadikan budaya Jawa sebagai budaya Indonesia diperparah lagi dengan kurangnya penelitian yang membahas tentang beragamnya budaya Indonesia, kemungkinan akan terjadinya kebingungan dan kecenderungan untuk men-generalisir nilai kebudayaan Indonesia yang sesungguhnya makin tinggi. Dengan demikian, penelitian ini dilaksanakan dengan tujuan untuk membuktikan bahwa terdapat perbedaan budaya diantara suku bangsa yang ada di Indonesia.

Untuk itu, kerangka budaya yang didesain oleh Hofstede dipilih beserta dengan Value Survey Module 1982 (VSM 82) miliknya. VSM 82 mengukur 4 dimensi budaya, yaitu: Power Distance, Uncertainty Avoidance, Individualism versus Collectivism, dan Masculinity versus Femininity. Pada kondisi normal, dimensi tersebut akan memiliki skor dengan rentang 0 hingga 100. Responden pada penelitian adalah para pekerja yang berasal dari lima suku bangsa besar di Indonesia, yaitu: Jawa, Sunda, Batak, Minang, dan Tionghoa. Pengambilan data dilakukan dengan metode Quasi-Snowballing. Secara total, terdapat 699 responden yang telah berpartisipasi dalam penelitian ini.

Hasil penelitian menunjukkan bahwa memang terdapat perbedaan yang signifikan diantara suku bangsa yang diteliti. Namun, skor dimensi kebudayaan Jawa menunjukkan bahwa skor mereka mirip dengan apa yang ditemukan oleh Hofstede. Ditambah lagi dengan fakta bahwa setelah semua hasil jawaban di kalkulasi ulang, hasil tesebut juga menunjukkan kesamaan dengan nilai yang dimiliki Hofstede. Meskipun fakta menunjukkan bahwa VSM 82 dapat digunakan untuk melihat perbedaan yang signifikan diantara kelompok suku bangsa, pendekatan penelitian menggunakan kuesioner saja masih memiliki kekurangan, yaitu sulitnya mendapat informasi yang lebih mendalam mengenai sejauh mana kelompok suku bangsa tersebut berbeda. Dengan demikian, berdasar pada hasil penelitian ini, penelitian di kemudian hari hendaknya dilakukan dengan desain penelitian yang lebih baik. Contoh nyata adalah pengunaan wawancara mendalam setelah semua skor didapatkan. Cara seperti ini dapat menutupi kekurangan keterbatasan dari kuesioner.

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LIST OF TABLES

Table 2.1 Prior Studies ... 25

Table 4.1 Profile of Respondents ... 43

Table 4.2 Value Survey Module 82 Formulae ... 49

Table 4.3 Power Distance Scores of Five Ethnic Groups Studied ... 50

Table 4.4 Uncertainty Avoidance Scores of Five Ethnic Groups Studied .... 57

Table 4.5 Individualism Scores of Five Ethnic Groups Studied ... 62

Table 4.6 Masculinity Scores of Five Ethnic Groups Studied ... 69

Table 4.7 Javanese Comparison with Perdhana (2014) ... 78

Table 4.8 Batak and Javanese Scores Comparison ... 83

Table 4.9 Chinese Indonesian Comparison with Perdhana (2014) ... 86

Table 4.10 Range of VSM Dimensions Scores of Five Ethnic Groups ... 87

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LIST OF FIGURES

Exhibit 3.1 Steps Taken During the Study... 40

Exhibit 4.1 Gender ... 44

Exhibit 4.2 Age ... 45

Exhibit 4.3 Education Qualification ... 46

Exhibit 4.4 Job Position ... 48

Exhibit 4.5 Full Responses on Question 19-1 ... 53

Exhibit 4.6 Full Responses on Question 20-1 ... 54

Exhibit 4.7 Question 22-1 Subordinates Afraid to Contradict Boss ... 56

Exhibit 4.8 Question 21-1 Intensity of Being Nervous about Job ... 59

Exhibit 4.9 Question 19-2 Company Rules Should Not Be Broken ... 60

Exhibit 4.10 Question 23-1 Intention to Stay at Current Job ... 61

Exhibit 4.11 Question 4-1 Have Good Working Environment ... 64

Exhibit 4.12 Question 1-1 Sufficient Time for Personal or Home Life ... 65

Exhibit 4.13 Question 8-1 Have Pleasant People to Work with (IDV) ... 67

Exhibit 4.14 Question 13-1 Live in a Desirable Area ... 68

Exhibit 4.15 Question 8-1 Have Pleasant People to Work with (MAS) ... 71

Exhibit 4.16 Question 11-1 Have Chances for Better Financial State ... 72

Exhibit 4.17 Question 6-1 Have Security of Employment ... 73

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CHAPTER I

INTRODUCTION

This chapter explains the background that underlies this research. It also consists of research questions, the purpose of the research, and usefulness of the research and structure of the thesis.

1.1 Background of the Study

Over the past decades, the number of employees working in foreign-owned companies has significantly grown. It is resulted by the continuously expanding Multinational Enterprises (MNEs) around the world. Such activity has strengthening the realities of globalization (UNCTAD 2016). In the case of Indonesia, the country has seen a 6.88% increase in foreign direct investment from US$ 253.1 billion in 2014 to 271.8 billion in 2015. This number was higher than those of Thailand, Malaysia, Vietnam, Philippines, Cambodia, and Laos (The World Factbook 2016). For instance, it indicates that Indonesia is still seen as one of the promising economies in the Southeast Asia region for investors.

The consequences of the rise in foreign direct investment are more intercultural interactions. Many business activities will need to have teams consisted of foreign employees/managers and Indonesian employees. Intercultural interactions might cause problems if they are not well planned and prepared, creating frustrations among members of the team.

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or her home country. Understanding cultural differences will help them become more effective leaders and thus will increase the chance of their success in the new countries.

Culture has been recognized as a predominant factor in predicting human behavior and recent studies have shown its influences on business performance (Perdhana 2014; Matveev & Milter 2004). It is defined as “the collective mental programming of the mind that distinguishes the member of a group or society to the

other” (Hofstede, Hofstede, et al. 2010). In order to understand, measure, and

compare cultures, researchers have developed several methods known as cultural frameworks. One of the most widely used frameworks is Hofstede’s national culture dimensions.

Hofstede (1980) identifies four dimensions of national culture: Power Distance, Individualism versus Collectivism, Uncertainty Avoidance and

Masculinity versus Femininity. Later, in 1991, based on Bond’s Chinese Values

Survey across 23 countries, Long- and Short-Term Orientation dimension was added to the original four dimensions (Hofstede & Bond, 1988). In 2010, Indulgence versus Restraint dimension was added based on World Values Survey findings (Hofstede et al. 2010).

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ethnicities his respondents were, there is a tendency that he presents ethnic Javanese in explaining Indonesia (Perdhana 2014). Hofstede also admits his scores might be misleading in a multiethnic country like Indonesia (Hofstede et al., 2010; p. 158).

The need for understanding the complexity of Indonesia’ culture, however, is not matched by the availability of the empirical study findings in the country. Most studies discussing Indonesia’s culture disregarded the cultural variations in the country (e.g. Liddle 1996; Goodfellow 1997; Irawanto 2009; Irawanto et al. 2012). In response to this problem, recent studies have tried to bridge the gap.

Perdhana (2014) underlines that in order to understand Indonesia’s culture, more

careful approach should be taken. In this case, he proposes to draw comparisons among ethnic groups in Indonesia.

Given the dearth of literature available for foreign managers and possibly local managers managing Indonesian employees from various subcultures and

values, this study aims to bridge the gap by extending Hofstede’s work on

Indonesian employees originating from five major ethnic groups: Javanese, Sundanese, Batak, Minangkabau, and Chinese Indonesian.

1.2 Problem Statement

In Hofstede’s findings, Indonesia was reported to have large power distance

(PDI score 78), collectivistic value (IDV score 14), low masculine (MAS score 46), and low preference for avoiding uncertainty (UAI score 48). Although all

respondents satisfied Hofstede’s matched-sample requirements in terms of

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2014). Hofstede himself admits that his score may be misleading in a multiethnic country like Indonesia (Hofstede et al. 2010; pp. 158).

This leaves a question whether it is still relevant to rely on Hofstede’s

findings to understand Indonesia’s cultural values. By comparing the cultural values of major ethnic groups in Indonesia, this study aims to show that there are cultural variations that need to be acknowledged and provide a better explanation to the cultural variations that exist in Indonesia.

1.3 Purpose of the Study

Given the tendency to present Javanese culture as the culture of Indonesia and worsen by the lack of studies which discuss Indonesia’s cultural variations, there may be confusion and generalization toward Indonesia’s cultural values.

In response to the danger of generalizations, a more focused research is needed to investigate to what extent the differences among ethnic groups in Indonesia exists. The purpose of the present study was to assess whether a national cultural framework would be able to describe cultural differences among ethnic groups in Indonesia by studying Javanese, Sundanese, Minangkabau, Batak, and Chinese-Indonesian employees.

1.4 Objectives of the Study

The objectives of this study are:

1. to investigate the cultural values of Javanese, Sundanese, Minangkabau, Batak, and Chinese-Indonesian employees;

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1.5 Research Questions

1. What are the cultural values of Javanese, Sundanese, Minangkabau, Batak, and Chinese Indonesian employees?

2. To what extent does Hofstede’s national cultural framework meaningfully describe in-country cultural differences?

1.6 Significance of the Study

This research studied employees from five ethnic groups in Indonesia. It has been discussed that there is a tendency among many researchers to generalize Indonesians as having one single culture. Recent studies have shown that there are differences among ethnic groups which proved to be essential in determining one’s success in a business world (Perdhana 2014).

With the small number of literature that empirically discuss the variations of culture within Indonesia, the present study was aimed to fill in the gap by investigating five major ethnic group in Indonesia. Previous studies have mostly described Indonesia’s culture as one; disregarding the fact that Indonesia consists of thousands of ethnic groups with different customs and values.

This study was also conducted with the aim of contributing to both academic and practical level, as follows:

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2. As for practical benefit, this study will serve as an empirical finding regarding the actual condition of cultural values among Indonesian employees. Managers can refer to the findings of the study in trying to solve their problems in managing Indonesian employees. However, as this research studied only 5 ethnic groups out of 31 major ethnic groups in Indonesia, the generalizability is limited on the studied ethnic groups only.

1.7 Scope of the Study

The present study collected 699 responses from 1000 distributed questionnaires, making 69.9% response rate. The respondents were all employees

mainly residing in Central Java. With the help of Dr. Suharnomo’s students,

questionnaires were also sent to respondents’ domiciles. Therefore, the method

employed for the study was quasi-snowballing sampling method. The questionnaires were distributed from May 2014 until May 2015. All questionnaires were paper based and therefore the responses were manually inputted into the electronic form.

The instrument used in this study was Hofstede’s Value Survey Module

1982 (VSM 82). The use of this instrument was based on the rationale that it was

the closest instrument to the IBM’s value survey module. The weakness is,

however, VSM 82 doesn’t cover two additional dimensions that are only available

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1.8 Structure of Thesis

This thesis has been structurally written to adhere the Undergraduate Thesis Guidance of Faculty of Economics and Business. Therefore, there will be five chapters that will serve their own purposes with the following explanation:

CHAPTER I: INTRODUCTION

This chapter discusses the background and its theoretical rationale of this study, statement of the problem, research purposes and usefulness and the structure of this thesis

CHAPTER II: LITERATURE REVIEW

This chapter provides literature used for the present study as the theoretical basis, discussion regarding previous studies, framework and hypotheses.

CHAPTER III: RESEARCH METHODOLOGY

This chapter explains about the methodology used for the study, sampling and data, analysis method and data processing.

CHAPTER IV: RESULTS AND DISCUSSION

This chapter explains and describes the object of this study, the findings, data analysis, interpretations and implications of the study.

CHAPTER V: CONCLUSION

UNDERSTANDING CULTURAL VALUES DIFFERENCES AND SIMILARITIES AMONG INDONESIAâS FIVE MAJOR ETHNIC GROUPS - Diponegoro University | Institutional Repository (UNDIP-IR)