THE INSTITUTIONALIZATION OF AN INTERMEDIARY ORGANIZATION: A CASE STUDY OF ‘PEMUDA PANCASILA’ A BUSINESS INTERMEDIARY IN INDONESIA

Abstract

The institutionalization of an intermediary organization is imperative to legitimatize social and
people’s organizations within an Indonesian business context. The aims of this study are to
investigate the importance of providing such an organization as an intermediary institution in
negotiating, supporting, and providing assistance between a company and an authority. In this
case, the role of Pemuda Pancasila (PP) is scrutinized in order to provide an understanding on
how business in done in Indonesia. An interpretivism approach was used to acquire an in-depth
understanding of the organization, as well as its systems. Semi-structured interviews and
observations were employed to gather data, and an emic approach was used to reveal such
themes. The findings suggest three themes associated with the institutionalization of PP:
operational fieldwork, political ties, and ties with regulatory bodies. In conclusion, PP is
institutionalized as a reliable organization for its safety and useful links, both for internal
members and external parties. Through its connections, PP is legitimized as a part of Indonesia’s
business systems, in order to facilitate the process of negotiation and administration concerns.