Petrina Faustine is a professor at Magister Management of Administration and Technology Program at Bandung Institute of Technology in Indonesia.
Makassar Jewelry: A successful third generation family business
In a new series, Families in Business readers will learn about family business in Asia. This first article examines a family business in Indonesia that has been in existence for over 70 years.
Despite the common saying of "from clogs to clogs in three generations", it is possible for a family business to sustain its business under the management of the third generation. Makassar Jewelry (MJ) is one the many examples of family businesses in Indonesia that is successfully existing, and is even well developed.
MJ is a family business that produces gold and silver jewelry. The company was started by Chen Fang Ching (the grandfather of current MJ owner) in 1930s.
The company began as a relatively small scale handicraft business, with individual customers, rather than businesses, as their clients. In the beginning, silver jewelry was the major product, since the raw material's cost was relatively low, and thus was affordable by the small fund the family had for the business. With a great deal of persistency, Grandfather Chen managed his business for about 17 years
In 1947, the business was handed over to Jimmy Tandiary of the second generation. At this time, the company began to produce gold jewelry in greater quantities. The company management was handled by both Jimmy Tandiary and his wife, and the company survived for about 42 years. This was an extraordinary length of time, considering that at that time there were many drastic changes in the economic policies, which imposed many difficult challenges for entrepreneurs (see below description on economic conditions).
The third generation of Chen's family presently consists of five siblings. Johnny Tandiary is the third eldest son, and studied computer engineering at an American university. Johnny married Wenny Lai, an economics graduate from Taiwan University. Having a limited fund, this young couple started their own gold and silver jewelry business: Makassar Jewelry, which is located in Makassar/South Sulawesi Island. This third generation of the Chen family has run their company for 14 years.
Apprenticeship since childhood
Johnny Tandiary learned his father's trade at a very early age. Johnny's parents owned a goldsmith shop at the same location as Grandfather Chen, and there Johnny began an apprenticeship while he was still in primary school. Though his early jobs were quite simple, such as watching the shop visitors to prevent pickpocketing, they gave him a sense of responsibility and helped him learn about the family business.
Successful in difficult economic conditions
The world recession in 1930, as well as devaluation of the rupiah in 1968, 1970, 1978, 1983 and 1997, caused many problems, such as: underemployment, weak markets, underconsumption, a decreased ability of a developing country like Indonesia to export their product and oil crises.
But despite of all of these problems, the Tandiary family business succeeded in sustaining its business throughout the economic difficulties and even developed, step by step, from one generation to the next. The third generation is now successfully exporting their products all over the world.
Trustworthiness, good working experiences, employee retainment and good quality products are among the many factors that influence the sustainability of a family business. Good co-preneurship between husband and wife, who both have high commitment to the busineess, who have competencies that complement one to another, and who also have the vision to grow the family business (which will be managed by professionals rather than family members) enforce good results in family business. Makassar Jewelry is just one of the many family businesses in Indonesia that contribute to more than 82% of the Indonesian Gross National Product.