A new method to empower organizational readiness for change in Indonesian SMEs

Abstract

As per newspapers and national news reports, small and medium-sized enterprises (SMEs) in Indonesia, currently 26,574 in number, are spreading widely. The transformation of SMEs to large, mature business entities is slow. This study investigates the sluggish transformation of SMEs in Indonesia and offers new explanations for the sluggishness, focusing on knowledge empowerment instead of financial aspects. A new development model was constructed with an aim to enhance SMEs. This study serves as research with a paradigm of constructivism, prioritizing knowledge empowerment. Executive officers of SMEs should aim for the construction of conceptual knowledge of social networks and social cognition in a sequential-ordered logic to achieve organizational readiness and readiness for change. They, moreover, internalize these concepts to transform SMEs into large, mature business entities with high levels of competitiveness, leadership engagement, dynamic capabilities, and profound sustainabilities.