Digital transformation of warungs in Indonesia: The interrelation of socio-technical and indigenous factors

Abstract

We investigate the moderating effect of an indigenous Indonesian concept, kekeluargaan (kinship ties and obligations), on the digital transformation (DT) of the warung, a traditional family microbusiness in Indonesia. Our study is structured as a multi-case study: we assessed how five warungs, to varying degrees, engaged in DT. Socio-technical systems theory guides the data collection via semi-structured interviews and observations. The data is analyzed through codification to look for themes and patterns from the multiple units of analysis. The findings show that the growth mindset of warung owners influences how they solve business problems, ensure operational efficiency, and increase profit. Some create an effective structure in operating their warung by working with their family members. Owners with a high technology mindset successfully learn and adapt the technology. We theorize that kekeluargaan plays a moderating role for the owner where technology-related tasks are concerned. We found that when kekeluargaan is present, it positively moderates the owner's engagement in technology-related tasks. However, when kekeluargaan is absent, the moderating effect is low. The findings extend the literature on DT for microbusinesses with indigenous cultural factors that should be considered to successfully transform a traditional business.