Digitization of small and medium-size restaurant enterprises: the mediating role of owner/manager IT skill and moderating influence of COVID-19

Abstract

Purpose The purpose of this study is to empirically examine the moderating effect of the COVID-19 pandemic on SME digitization in the restaurant sub-sector of the hospitality industry. The study further seeks to examine the mediating role of owner/managers’ skills and attitudes on the digitization efforts of SMEs.Design/methodology/approach Data from 397 owners and nonowner executives of 261 restaurant SMEs were analyzed using Partial Least Square Structural Equation Modelling (PLS-SEM).Findings The findings show that the COVID-19 pandemic is a significant moderating factor that could positively influence SMEs in the restaurant sector to digitize their operations. The study found no direct relationship between digital strategy, competitive pressure, and SME digitization. However, the study’s findings show that owner/managers’ skills and attitude are a significant positive mediator for SME digitization.Research limitations/implications The study is limited to one sector in the hospitality industry. Additional studies are required to analyze multi-source data from other SMEs to deepen our understanding of the influence of the COVID-19 pandemic on SME digitization. Other moderating and mediating variables could also be examined.Practical implications The significant moderating influence of COVID-19 implies that restaurant SMEs could take advantage of the pandemic and move from the marketplace to market space by digitizing their operations. To achieve this, they need to invest in owner/managers’ digital skills.Originality/value To the best of the authors’ knowledge, the study is among the first to empirically examine the moderating influence of the COVID-19 pandemic on SME digitization from an emerging market context.

Keywords

• SME digitization
• owner/manager IT skill
• hospitality industry
• organizational culture
• digital strategy
• base view theory