Rodamas Group: Designing Strategies in Erging Economies

The Dutch trade of commodities influenced Indonesia’s economy in the way that they introduced land tax, made trade routes, and printed money. The Dutch first implemented land tax by telling farmers to give them one fifth of what they harvested (“Colonial Period of Indonesia.”) This system was called the cultivation system. After the farmers gave one fifth of their harvest they got a fixed amount of money that has no relation to the value of the crops. “The Dutch and Javanese officials received bonus when their residency delivered more crops…” (“Colonial Period of Indonesia.) This made encouraged them to increase production so that they could get more money. This led to corruption (“1820-1950 Indonesia and Decolonization – Timeline Dutch History”.)

They know that growth is lacking and that in order to survive, DMC must alter course now. Senior leadership needs to determine which market segment to pursue, and how this strategy may or may not affect other areas of the company including, but not limited to: Human Resources, Manufacturing and Distribution. Senior leadership must also be aware that any change in strategy will influence I.T. also. While IT is a broad-minded team willing to offer up technical solutions to advance product development and sales, their budget, as well as other departments has been inhibited over the course of current recession and the inconsistency of returns to the company.

Indonesia is a rich country with its resources. Not only oil and gas, but Indonesia also had been a producer of mining and agricultural products such as rubber, tin, tea, coffee, spices and timber. In 2002, timber is one of the key export for “non-migas” (non oil and gas) commodities to provide foreign trades.

According to AAFC (Agriculture and Agri-Food Canada, 2010) due to its extensive natural resources and geographical location, in the way of several of the world’s most important trading routes, Indonesia represents the Southeast Asia’s largest economy. On a global perspective, Indonesia is the fourth most populated country and has the largest Muslim population, besides being the world’s largest archipelago, with around 17,000 islands. The country’s GDP (Gross Domestic Product) is also showing considerable and stable growth throughout the years and unemployment rates dropped considerably (AAFC, 2011).

In addition, developing in the current market fits to the family constraints. Indeed, no more mobility is implied relatively to the current situation. Therefore, the company can focus on improving its managerial competencies and notably strengthen its overseas relationships.

Economic system is a system of beliefs (concerning work, property and wealth), activities (extractions, production and distribution), organizations(business firms, labour unions), and relationships(ownership, management) that provide the goods and services consumed by the members of a society.(Cullen 2011, p.81) The economic system is unique in that Indonesia has a market-based economy in which the government plays a significant role. There are 141 state-owned enterprises, and the government administers prices on several basic goods, including fuel, rice, and electricity. Growth rebounded in 2010 to 6.1% and is forecast to have reached 6.2%-6.5% in 2011. Poverty and unemployment have also declined despite the global financial crisis, with the poverty rate falling to 12,5% (March 2011) from 13.3% a year earlier and the unemployment rate falling to 6.6% (February 2011) from 6.8% a year earlier. In December 2011, Fitch Ratings upgraded Indonesia’s sovereign debt rating to investment grade. . There are many potential infrastructure projects in multiple sectors including hydroelectric and solar power, palm oil, new roads including toll motorways, mining, expansion of broadband internet, and

The overdependence on the American market exposes the company to various risks due to the various fluctuations and uncertainty in the economic landscape.

It may be necessary to change the objectives, alter the scale of international plans, or abandon them. One market may offer immediate profit but have a poor long-term outlook, while another may offer the opposite. Only when corporate objectives are clear, such differences can be reconciled clearly.

The Indonesian government has shown, through its interactions with Bre-X, that it is easily influenced by the demands of President Suharto’s family and by pressures from respected individuals. For example, the Barrick proposal received endorsement from the government only after Barrick hired Suharto’s daughter (Tutut) and encouragement from former U.S. President George Bush and former Canadian Prime Minister Brian Mulroney. Despite making an alliance with PT Panutan Duta in late October, Bre-X was late in recognizing the importance of relationship building in conducting business in Indonesia. With only eight days to negotiate the deal with Barrick, Bre-X does not have time to develop the necessary connections to succeed in Indonesia without a competent partner.

Indonesia is the sixteenth largest economy, the largest economy in the South-east Asian economic region with the world's fourth largest population (263 million in 2017). It is an emerging economy that has increased its international integration, trade liberalisation and diverted from policies of import substitution towards export-led development. Indonesia is a member of the Group of 20 (G20) major economies and has been an active founding member of the World Trade Organisation (WTO). The impact of globalisation has benefited Indonesia as quality of life indicators and economic developments have improved but it also presents the challenge of improving regulations, building more competitive industries, increasing investment into education and infrastructure to remain competitive. Consequently, Indonesia has introduced numerous strategies to promote economic growth and development.

Indonesia complained of their lack of autonomy In regions such as Maluku or other areas of Eastern Indonesia, “a low capacity for generating local revenue restricted the ability to adapt projects and development to local conditions” (Bertrand, 198).). The scanty amounts of funds were unable to support the poor and other problems. Bertrand states, “Faced with the New Order regime introduced mild reforms that were designed to address some technical issues while avoiding political decentralization” (Bertrand, 198). In 1995 the Minister of Home Affairs selected 26 districts were used to evaluate the measures designed to increase autonomy. They noticed an increase in Indonesia budget, but they still failed to support the poor, which resulted in

Indonesia is the largest economy in South East Asia, primary industry of industry (47%), agriculture (15%) and a service industry that makes up nearly 40% of the GDP. More than 1,000 islands totalling almost 2,000,000sq/km make up the largest archipelago in the world. In 2012 the labour force stood at 120 million, 16 times the population of NSW. So what we have is a top 20 economy with a huge workforce and natural resources worth 10s of billions a year.

My long-term goal is to work in a position that enables me to direct and make strategic decisions in the public, private and non-profit sectors. These goals will lead me to bridge the gap between national competitiveness and international trade market within the changing trade and financial environments. I also dedicate myself to give significant contribution to Indonesian Government institutions, national and multinational enterprises in facing current globalization, trade openness and economic

“Since the economic crisis started in 1997, an increasing number of people in Indonesia are thrown into the harsh reality of joblessness. More than 40 million people are without a reliable income from employment in Indonesia today. Rates of criminality have increased, not least as a consequence of weakened state and police power since the fall of Soeharto'sauthoritarian regime in 1998.” (Kristiansen, 2003)

Since 1965, the president of Indonesia continued to provide continuity and stability. However, in order to define an effective and complex growth plan, a company wishing to be successful needed the president’s support to succeed in the plan.