THE CIPUTRA GROUP: SHAPING THE CITY IN ASIA “If you have the will, and the spirit, and you have confidence, you follow up with forecast, all will happen.” Mr. Ciputra Mr. Ciputra, founder of the Ciputra Group, looked back on his long career as one of Indonesia’s most prominent entrepreneurs. As a developer in the real estate sector, he had provided modern and comfortable spaces for millions of Indonesians to live, recreate, shop and work. Ciputra’s courage, vision and expertise led to extraordinary successes in the 1990s. But the Ciputra Group also went through a particularly difficult period during the Asian Crisis of 1998, a crisis that exposed the vulnerabilities of the Ciputra Group’sbusiness model. Ciputra had felt relieved when the last debt restructuring agreement was signed in 2005. Yet, right at the moment when the Ciputra Group was gearing up for a new era of growth, a globaleconomic crisis struck in late 2008. Ciputra, who was now 77 years old and planning to retire, was againforced to reassess the Ciputra Group’s strategy. He thought about the appropriate balance between his many ideas for innovative real estate projects and the level of risk the company could manage. Theongoing transfer of leadership toward his children and children-in-law also required his attention. Howcould the business continue the tradition of entrepreneurship while also building a professionally managed family business group? The Ciputra family needed to work out a comprehensive strategy to prepare thefamily business for the next decades. AWAKENING THE SPIRIT OF ENTREPRENEURSHIP His father passed away in prison in 1943,when Ciputra was only 12 years old. Ciputra, then a fatherless child, was raised in poverty, but he was ableto continue his schooling after the war. After completing high school, he subsequently went to the famousInstitute of Technology Bandung (ITB) in Java, where he studied architecture. His career would be onethat showed, as he himself explained, his “spirit of entrepreneurship.” Because the allowance he received from his mother during his university days was not sufficient, he startedhis first venture as a student in 1957. He established an architecture consulting agency with two friends,Budi Brasali (who passed away in 2006) and Ismail Sofyan. After graduating in 1960, Ciputra decided that,rather than working as a consultant for others, he wanted to implement his own ideas as a developer. Ciputraworked and subsequently became the chief executive officer of Pembangunan Jaya, a developer partly ownedby the Jakarta provincial government, where he stayed for 35 years and worked closely with several ofJakarta’s former governors. In this capacity, he shaped Jakarta, including building or renovating severalprominent markets, a recreation park and various housing projects. Aside from this job, he and his friends also established the Metropolitan Group after graduation, whereCiputra became the president commissioner, a non-executive role in which.

1. THE CIPUTRA GROUP: SHAPING THE CITY IN ASIA “If you have the will, and the spirit,
and you have confidence, you follow up with forecast, all will happen.” Mr. Ciputra Mr. Ciputra,
founder of the Ciputra Group, looked back on his long career as one of Indonesia’s most
prominent entrepreneurs. As a developer in the real estate sector, he had provided modern and
comfortable spaces for millions of Indonesians to live, recreate, shop and work. Ciputra’s
courage, vision and expertise led to extraordinary successes in the 1990s. But the Ciputra Group
also went through a particularly difficult period during the Asian Crisis of 1998, a crisis that
exposed the vulnerabilities of the Ciputra Group’sbusiness model. Ciputra had felt relieved when
the last debt restructuring agreement was signed in 2005. Yet, right at the moment when the
Ciputra Group was gearing up for a new era of growth, a globaleconomic crisis struck in late
2008. Ciputra, who was now 77 years old and planning to retire, was againforced to reassess the
Ciputra Group’s strategy. He thought about the appropriate balance between his many ideas for
innovative real estate projects and the level of risk the company could manage. Theongoing
transfer of leadership toward his children and children-in-law also required his attention.
Howcould the business continue the tradition of entrepreneurship while also building a
professionally managed family business group? The Ciputra family needed to work out a
comprehensive strategy to prepare thefamily business for the next decades. AWAKENING THE
SPIRIT OF ENTREPRENEURSHIP His father passed away in prison in 1943,when Ciputra was
only 12 years old. Ciputra, then a fatherless child, was raised in poverty, but he was ableto
continue his schooling after the war. After completing high school, he subsequently went to the
famousInstitute of Technology Bandung (ITB) in Java, where he studied architecture. His career
would be onethat showed, as he himself explained, his “spirit of entrepreneurship.” Because the
allowance he received from his mother during his university days was not sufficient, he
startedhis first venture as a student in 1957. He established an architecture consulting agency
with two friends,Budi Brasali (who passed away in 2006) and Ismail Sofyan. After graduating in
1960, Ciputra decided that,rather than working as a consultant for others, he wanted to
implement his own ideas as a developer. Ciputraworked and subsequently became the chief
executive officer of Pembangunan Jaya, a developer partly ownedby the Jakarta provincial
government, where he stayed for 35 years and worked closely with several ofJakarta’s former
governors. In this capacity, he shaped Jakarta, including building or renovating severalprominent
markets, a recreation park and various housing projects. Aside from this job, he and his friends
also established the Metropolitan Group after graduation, whereCiputra became the president
commissioner, a non-executive role in which he actively provided guidanceand facilitated the
development of this expanding group. Other investors, such as the Salim Group, werealso
involved in a subsidiary of the Metropolitan Group, which developed the first privately built

2. satellitecity of Jakarta. The group also had investments abroad. In 2009, his long-term partner,
Ismail Sofyan, wasstill playing an active role within the Metropolitan Group. In the 1980s, the
three friends, who had hitherto shared their projects, decided that they could now starttheir own
groups once their children grew up. So, when Ciputra’s children graduated and returned
fromtheir university studies overseas, Ciputra started his own family group, the Ciputra Group,
in which his children, children-in-law, wife and brother were active. The new Ciputra Group was
created for hischildren, whom he hoped would grow as professionals and continue his
entrepreneurial spirit in theproperty sector. Ciputra was considered the pioneer of the Indonesian
property sector, and was often credited and awardedfor his visionary ideas. One of his
achievements was to think big. He could see opportunities where otherscould not. In the late
960s, while heading Pembangunan Jaya, he transformed a swampland, infested with mosquitoes
and monkeys, intothe now popular Jakarta seaside,Taman Impian Jaya Ancol, re-positioning
Jakarta as a beach city.According to Ciputra: “Every problem is an opportunity. The more
difficult the problem, the moreopportunity: that is entrepreneurship.” When his colleagues were
thinking mere buildings, he was thinking new towns. The development of entiresatellite cities, or
new towns, was a business model that became one of the trademarks of Ciputra, althoughit was
gradually copied by other players in the market. His first project, while still with Pembangunan
Jaya,was a project called Bintaro Jaya. Since the 1960s, Jakarta, like many other Asian cities,
witnessed a largeinflux of people from the rural areas While infrastructure was often officially
the task of the government, the latter frequentlylacked the skills or budget to actually construct
and maintain it. Especially after 1985, a period ofderegulation in Indonesia, the government
warmed up to the idea of using the private sector to develophousing and public infrastructure. It
was in this vacuum that Ciputra saw commercial opportunities. With a keen eye for promising
new business models, Ciputra moved into these large-scale propertyprojects, and provided
middle- and upper-class citizens with living conditions that the government couldnot provide.
TheCiputra Group targeted the upper middle class for its large-scale property projects, and
offered services andfacilities beyond what other areas offered, including healthcare, security,
maintained roads and greenery. Middle-class Indonesians were willing to pay for much more
pleasant and convenient living conditions. Internally, the company sought to stimulate an
entrepreneurial spirit. All employees — from directors toadministrative staff — were encouraged
to develop their sales qualities, and one executive spoke highly ofCiputra’ssecretary, who had
already sold several apartments. The group held competitions betweendifferent project teams,
and the winning project teams would go abroad on trips together. Ciputra explainedthat all
project staff would be rewarded: “Yes, until servants and security people go there. All go there.
One group went to Paris — the Citra Garden team — they chose where they wanted to go. We
gave theman extra bonus of 3-8 months.” Ciputra liked to involve staff at all levels in projects,

3. and he regularlyinteracted with younger staff members and stimulated them to express their
views. All employees lookedup to Ciputra, and several insiders remarked that “he is so
outstanding.” NEW GENERATIONS Ciputra had four children: the eldest two were daughters,
and the youngest two male twins. Because heconsidered them all talented, the eldest two
daughters with their spouses (respectively, Rina CiputraSastrawinata and BudiarsaSastrawinata;
and Junita Ciputra and Harun Hajadi) each led one division of the Ciputra Group, while the twins
(Cakra and Candra Ciputra) led another. Budiarsa focused on theinternational projects, including
the new town in Vietnam, and had built contacts with officials in thatcountry. Harun, amongst
others, ran several large projects in Surabaya, another large city in Indonesia. Thetwins were
mainly active in commercial buildings like offices in Jakarta. Although the official structure
ofthe group and its listed companies did not reflect this, informally the projects were divided
amongst thechildren, who were engaged in subtle competition.There were differences in style
between the children. An executive of the Ciputra Group commented that“Candra is only
involved in the strategy, not in the daily operations. Harun is involved in everything, he ismore
in the details. He also has an architect background, so he is also involved in the design. Budiarsa
is inthe middle. Candra is more interested in the financial aspects, such as the stock market.” The
division led by Rina and Budiarsa had become reluctant to borrow after the crisis, and tried to
avoid this at all costs,instead choosing to work with partners who provided financing and land.
Harun, however, thought that thismight be too conservative, and took a slightly different
approach. As such, within one company, there wasa diversity of managerial styles and project
preferences. One of the insiders remarked: “Are the subholdingsgoing to go on their own or is it
one person that will succeed Ciputra? Now was a good time to plan the strategy for the firm and
for the family and to strengthen the business forthe coming decades. Whereas the group had been
designed along the way by the founder, as it grew larger,a more systematic view of the progress
of both the business and the family in different stages could supportits future development.
1. As a new CEO
a. How will you organize the new Ciputra group and what will be the roles of Mr. Ciputra's
children and children-in-law? ( please see section New Generations of the Prerequisite)
b. How will you manage your folowers to achieve your new vision ? Considering most of your
folowers are "the millennials" what kind of leadership style do you think is the best for Ciputra
Group? please explain briefly this leadership style
Solution
a.
Organization like the one as Ciputra hold a very wide list of stakeholders (employees and

4. others). These stakeholders can be managed by only one way i.e. by keeping them convinced and
motivated. But it is very difficult for a single person to take care of such huge amount of people.
This can be only done by distributing authorities to peoples working on the managerial level. The
managers will directly report to the executive person who will take major decisions. However,
the appointed authorities must also be delegated with certain powers so that they feel motivated
and work with full dedication for the company.
This will help the executive person to focus on the entire business else handling everything will
not do any good because it will only hamper the performance as a single person cannot look after
such a business.
It is very clearly mentioned in the case, that the children and the in-law-children are distributed
powers in terms of different project. I will suggest the same because this way every person will
feel more motivated and dedicated towards their work as delegation of powers to each one will
create a feeling of competition in everyone’s mind and everyone will thus, strive to do their best
and make their divisions work well than the others. And, his will only bring prosperity to the
company. However, it is very necessary that they should always work as a team unitedly and
strive to achieve one common goal.
b.
it is very easy the manage the followers. The followers can be managed by making them believe
that the organization is doing well. The followers will not reciprocate unless they are made to
believe that their interest is well maintained. To do so, the changes that might occur must be wel
managed.
Millennials are the people who are born in between 1983-2000. They are very clear about their
needs and wants. They follow what they feel is right and they can do anything to achieve their
goals i.e. they are highly result oriented. Thus, if the organization makes it to win the trust of this
generation they can be well managed.
The trust can be won by following a participative leadership style where everyone is free to share
their viewpoints. This freedom and participation opportunity provided to the generation keeps
them motivated and dedicated towards their work as they feel that their opinon is being valued
and considered. However, a decision should be made after a very deep analysis of every aspect
of the business.