LEADERSHIP STYLE IN MANAGING PARENT-CHILD FIT COMPANY WITH DIFFERENT CULTURE CASE STUDY AT CHINESE MULTINATIONAL E-COMMERCE COMPANY IN INDONESIA

• Main Author: Faisal Mihardja, Iman
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/79807
• Institution: Institut Teknologi Bandung

In the growing internet industry, startups and e-commerces has emerged as one of the leading industries in Indonesia. New companies might secure funds through several sources such as investment from Venture Capitals, or dedicated investment from parent company. For companies that received investment only from selected parent company, they will have a unique dynamic due to close relationship between parent and child company as well as high dependency towards parent companies. With economic disruption in 2022 startups and e-commerces experienced growth slowdown and some even ended up closing down. Leadership within company might become a decisive factor in determining company’s future during the uncertain times. One of case example is JD.id, an e-commerce that is acting as subsidiary of JD.com, one of the biggest e-commerce in China with B2C model. JD.id started business in 2015 and managed to reach top 10 e-commerce in Indonesia. However, after economic disruption, JD.com as parent company decided to shutdown JD.id and layoff all of their employees. During the economic disruption happened in the parent’s company, leadership dynamic between JD.com and JD.id shifted and it is impacting to the change in direction of the child company by the decision of their parent company. With the sudden direction change, local leaders were expected to preserve company’s performance while losing their initial authority within company. As a result, local leaders in JD.id experienced pressure and was forced to change their leadership style. Each leader in JD.id experienced a different leadership style shift since leadership style is influenced both by individual and by how the team is impacted by JD.com economic situation. This research explores the effect of leadership style in JD.id as a child company during parent’s economic disruption as well as observing changes of leadership style after reduced invested capital in JD.id. Through conducting the analysis, this research also provides lessons that can be learned for another e-commerce company that is acting as child company. ii To conduct analysis, 2 BOD and 9 managers from JD.id were interviewed with 12 questions that is focusing to explore the condition and leadership style within child and parent company prior to and during economic disruption. The result of the research JD.com and JD.id has a Ballast business type of a parentchild fit matrix, which means both of the company are in the same industry with no opportunities for the parent to add value. Going through economic disruptions, parent company leadership style begins to shift into situational leadership where the parent starts to become a dictator to the child’s company. The most impacted division with the sudden direction changes and interference from the parent company is commercial division. Since they directly interact with budgets and promotions, so once the investor no longer confidence to put more money into the company, commercial team no longer be able to work properly. This impacting to the way their local leader leadership styles begin to change, where most of them change into adaptive leadership and some of them lost their leadership style with the fact that the parent interferes most of their decisions. To provide similar case to the company to happen to other parent-child e-commerce company it would be better if both companies have a clear strategy of doing business in different countries, parent needs to give certain level of dependance to their child company, and give more training for leaders to face certain unexpected condition in doing business.