Date of Award


Degree Type


Degree Name

Bachelor of Business Honours


Faculty of Business and Public Management


Indonesia and Malaysia are two of Australia's closest geographical neighbours and represent major trading partners; Malaysia, as one of the economic success stories of Southeast Asia and Indonesia, as the third most populous nation in the world are politically and economically of great significance to business in Australia. Both have experienced racial rioting, the former as recently as 1998, and the later in 1969. Much of the tension that has led to these riots centres around the relationship between the ethnic Chinese communities in these countries and the other ethnic groups, particularly the Pribumi in Indonesia and the Bumiputera in Malaysia. Ethnic Chinese control much of the wealth in these two countries, even though they constitute 3 percent of the population in Indonesia and 27 percent in Malaysia. Understanding the dynamic of the relationship between these groups in a business contact is of immense value to Australia business, particularly in consideration of the wealth of the ethnic Chinese and the proximity of these nations. This research attempts to contribute to that understanding by comparing the management of ethnic groups in each country. This will facilitate the determination of the destination of Australian foreign investment in this region, as well as provide insight for cross-cultural managers. The research is made more significant by the present lack of literature in this area, particularly of a comparative nature. The research suggested, from in depth interviews with ten Indonesian and Malaysian managers that in general, Malaysian managers show a greater degree of positive differentiation in the management of ethnic groups than Indonesia managers, as well as commenting on some of the ramifications of this. This must be qualified by pointing out that there appears to be significant common ground in their respective approaches, but the research suggests that on the whole, Malaysian managers differentiate more positively. The research was limited by a number of factors including time, lack of existing literature and sample size. A number of assumptions were also made, including that the managers interviewed are representative of their respective nations, they were honest in their responses and that mangers tend to follow the wider societal trends in their respective nations. Further research needs to be done not only to support this research, but also to determine the extent of the apparent difference in approach between Malaysia and Indonesia.