Untitled

The Role of Digital Transformation and Entrepreneurial Orientation in
Achieving Competitive Advantage Through Organizational Change and

Innovative Behavior in Industry 4.0
Philosophy of Science and Research Methods

Lecturer: Ir. Ruslan Prijadi, MBA., Ph.D
Prepared by:
Dian Alanudin
NPM: 1906417395
PROGRAM PASCA SARJANA ILMU MANAJEMEN

FAKULTAS EKONOMI & BISNIS
UNIVERSITAS INDONESIA
2020
TABLE OF CONTENT
TABLE OF CONTENT .................................................................................................................................. 2

ABSTRACT ................................................................................................................................................... 6
CHAPTER 1. INTRODUCTION .................................................................................................................... 7
1.1. Research Background........................................................................................................................... 7
1.2 Research Gaps……… ......................................................................................................................... .9
1.3. Research Question.............................................................................................................................. 10
1.4. Research Contribution ........................................................................................................................ 10
CHAPTER II. LITERATURE REVIEW ....................................................................................................... 19
2.1. Theoretical Map ................................................................................................................................. 19
THEORY OF THE GROWTH...................................................................................................................... 29
CHAPTER III. RESEARCH MODEL & HYPOTHESIS .............................................................................. 30
3.1. Hypothesis Development.................................................................................................................... 30
CHAPTER IV. RESEARCH METHODOLOGY .......................................................................................... 36
4.1. Research Approach ............................................................................................................................ 36
4.2. Questionnaire Development ............................................................................................................... 36
APPENDIX A. Operationalization of Variables ........................................................................................ 40
APPENDIX B. Construct Measurement .................................................................................................. 401
APPENDIX C. Questionnaire Digital Transformation ............................................................................... 44
APPENDIX D. Questionnaire Entrepreneurial Orientation ........................................................................ 46
APPENDIX E. Questionnaire Organizational Change ............................................................................... 47
APPENDIX F Questionnaire Innovation Behavior .................................................................................... 49
APPENDIX G. Personal and Branch Information ...................................................................................... 58
REFERENCE ............................................................................................................................................... 59
LIST OF FIGURES
Figure 2.1. Definition of Entrepreneurial Orientation .......................................................... 18
Figure 2.2. Theoretical Map .................................................................................................29
Figure 3.1 Research Model and Variable Operationalization ............................................... 31

5
LIST OF TABLES
Table 2.1 Summary of Existing Research on Organizational Change ................................................ 18
Table 4.1 Branches List of PT Pegadaian in Indonesia ...................................................................... 37
Table 4.2 Unit Analysis of Branches List PT Pegadaian in Indonesia ................................................ 38
Universitas Indonesia
6
ABSTRACT
Drawing upon prior research, digital transformation has become a primary topic in a transition
economy and industry 4.0. Studies focusing on the comprehensive explanation of the role of Digital
Transformation (DT) and Entrepreneurial Orientation (EO) to Organizational Change (OC) concepts
are still limited. This paper aims to elaborate these roles using three fundamental questions: WHAT
(what is the role of digital transformation and entrepreneurial orientation to OC), WHY (why the role
of digital transformation and entrepreneurial orientation are crucial), HOW (how digital
transformation and entrepreneurial orientation will impact organizational change and how this OC
link to competitive advantage). The birth of a new culture, digital culture, pushes every company to
adopt a digital transformation. Digital transformation is a survival issue in adding value to a process
and value creation to the customer. Nevertheless, the topic related digital transformation impact on
organizational change in industry 4.0 is less exposure in the literature. In order to fill the gap in the
literature, this study emphasizes the digital transformation and entrepreneurial orientation as the two
determinant factors of Organizational Change (OC) to create innovative behavior and competitive
advantage at PT Pegadaian to overcome the changes in the fast-changing era, Industry 4.0. In this
study, the sample was used 200 branches of PT Pegadaian with highly competitive market conditions
based on a quantitative study.
Keyword: Organizational change, digital transformation, entrepreneurial orientation, innovative

behavior, competitive advantage
7
CHAPTER 1
INTRODUCTION
This section will introduce the background of the research and arguments why the role of
digital transformation (DT) and entrepreneurial orientation (EO) are crucial and how these two
things as the determinant factors of organizational change (OC). With digital transformation and
entrepreneurial orientation as a driver and context for organizational change, innovative behavior,
and performance, make this research is crucial in the strategic management area, especially for in
industry 4.0. The author divides the research background into five sections, including research
background, research gaps, research objective, research question, as well as research contribution
raised in this research.
1.1. Research Background
Digital transformation, entrepreneurial orientation, and organizational change dominate

discussions from scholars to professionals in a high transition economy from journal headlines to
boardrooms in recent years. Strategic management scholars have detail and full attention to
organizational change (OC) research. Entrepreneurial orientation is an essential driver of
organizational change; patterns of change particularly relevant to understanding the manifestation
of entrepreneurial orientation (Miller 2011, Wales et al., 2011). According to Anderson, Covin,
and Slevin (2009), EO to strategic learning capability relationship fully mediated by three primary
constructs; (1) structural organicity, (2) market responsiveness, and (3) strategy formation mode.
The most common conceptualizations of strategic learning capability stress the strategic change
component of the construct (Anderson, Covin, Slevin, 2009). EO is defined as an organizational
willingness to find and accept new opportunities and take responsibility for change (Morris et al.,
1996). EO and DT are two determinant factors that derive organizational change. Nambisan et al.
(2019) argue that the capacity exhibited by digital technologies will produce unprompted change
through recombination by large, varied, unrelated, unaccredited, and uncoordinated actors. These
studies identify the three key themes related to digitization; (1) openness, (2) affordances, and (3)
generativity. Beyond simply opening new opportunities for innovators and entrepreneurs, digital
technologies have broader implications for value creation and value capture.
Appelbaum, Normand & William (1998) study a model that explains the relationships
between Organizational Change (OC), leadership, learning, motivation, and productivity. OC is
an integrative process with all organizational elements, such as human resources, systems, and
8
technologies being considered for successful change. Organizational change will derive
organizational innovative behavior. A complex division of labor, an organic structure, and a high-
risk strategy produce consistent findings relative to organizational innovation. The complexity of
the division of labor is most important because it taps the organizational learning, problem-solving,
and creativity capacities of the organization (Hage, Jerald, 1999). Liu, Chih-Hsing (2017) studies
linking the perspectives of organizational learning, innovative behavior, and intellectual capital to
competitive advantage. This study argues that open-minded about exploratory and exploitative
learning can open the door to capturing opportunity and competitive advantage through increased
innovative behavior and human capital accumulation. The intellectual capital (IC) theory has also
confirmed that social capital and relational capital will strengthen the relationship between
innovative behavior and human capital. The role of entrepreneurial orientation in achieving
competitive advantage through organizational change and innovative behavior as an integrated and
holistic approach. EO and DT are two determinant factors that derive organizational change, but
the study focusing on digital transformation that impacts organizational change is still limited.
Nambisan et al. (2019) argue the three key themes related to digitization and change. Generativity
is the capacity exhibited by digital technologies that will produce unprompted change through
recombination by large, varied, unrelated, unaccredited, and uncoordinated actors. These studies
identify the three key themes related to digitization; (1) openness, (2) affordances, and (3)
generativity. Beyond simply opening new opportunities for innovators and entrepreneurs, digital
technologies have broader implications for value creation and value capture. In the context of
industry 4.0. Frank, A.G. et al. (2019) provides a foundation for the growing research on the
interface between servitization and Industry 4.0. Servitization is mainly focused on adding value
to the customer (demand-pull), while industry 4.0 is frequently related to adding value to process
(technology-push).
Past studies in organizational change have found several factors that influence the level of
organizational change and mostly categorized them into two categories, which are individual and
workplace factors (group and organizational level). Holt et al. (2007) have defined four (4)
elements that influence organizational change, which is content, process, context, and the
individual involves. Holts argue the development and evaluation of an instrument that can be used
to gauge organizational change at an individual level. Shaul Oreg, Maria Vakola, and Achilles
Armenakis (2011) argue the determinant that comprise pre-change (change recipient
characteristics and internal context) and change (change process, perceived benefit/harm, and
change content). In other studies, behavior fit predicted reactions to the change. Specifically, the
degree to which the organization's existing values were aligned with the change vision and
9
objectives predicted change recipients of organizational change (Jones et al., 2005). In another
study, the degree of perceived fit between the behavior of two merging organizations was
negatively correlated with change-related stress (Cartwright & Cooper, 1993). Ng' ang' a Elijah
(2016) argue about the adoption of a digital transformation with top management support and
commitment, organizational behavior, level of communication, and level of employee
involvement as the Independent variables. From the literature review, there is less research about
digital transformation or entrepreneurial orientation as OC determinants.
From the phenomena background, since the new birth of digital in industry 4.0, digital
transformation and entrepreneurial orientation are two of the significant drivers to scale up
productivity and overcome a highly competitive environment. In this digital and internet era, which
provides connectivity and the switch of the concept of their own economy to sharing economy,
companies will have significant potentials to work on collaboratively. Digital transformation and
entrepreneurial orientation as resources should be drivers to organizational change (OC) in
creating innovative behavior and competitive advantage. OC is a continuous process in building
and shaping people, organizational and systems, strategy, knowledge management, technology
and IT, and collaboration, and connectivity. Organizational change starts from a shift in corporate
mindset to a first-class IT department is a priority for every company to survive in this digital and
internet era of industry 4.0. Change increase a company's potential to produce competitive
advantage and performance continuously.
1.2 Research Gaps
Based on the existing OC research, digital transformation, and entrepreneurial

orientation studies focusing on the comprehensive explanation of its role to organizational
change (OC) concept are still limited. Several theoretical and empirical research gaps can be
explored for future research. The exploration of existing digital transformation studies and
research gaps in the organizational change area previously lead to the birth of a new culture,
digital culture, pushes every company to change and adopt a digital transformation. A firm
using organizational change integrate their actions to support and implement strategies;
determining the best way to competitively manage the firm's efforts to process of changing an
organization's structure, technologies, and culture, as well as the effect of such changes on the
organization. In capturing the opportunity through innovation, digital transformation is a
survival issue in adding value to a process (technology push) and value creation to the
customer (demand-pull). Nevertheless, the topic related digital transformation effect to
organizational change in industry 4.0 is less exposure in organizational theory and literature.
10
In empirical context about the role of digital transformation impact on organizational change
has less studied in the literature. While the role of entrepreneurial orientation studies effect,
organizational change is well addressed. It is important to understand the role of digital
transformation effects toward the outcomes of competitive advantage through organizational
change and innovative behavior in the fast-changing world; industry 4.0.
These gaps are also present in OC literature in general (Holt et al. 2007; Ahmad et al.
2018). There are numbers of articles study determinants of organizational change (OC) in large
firms as well as SME (Iverson, 1996; Cunningham et al., 2002; Jones et al., 2005), but the issue
about digital transformation and entrepreneurial orientation as OC determinants have not been
addressed before. As an addition, there is still limited research about OC within industry 4.0
context.
1.3 Research Question
In order to fill these research gaps, this study raises a research question of “what is the
role of digital transformation and entrepreneurial orientation has an association with
organizational change (OC) process, and whether it has any influence toward innovative
behavior and competitive advantage?” The sub-research question that will be derived into
the research model is presented as follow:
1. How digital transformation and entrepreneurial orientation demand change in the
organization?
2. How does organizational change can create innovative behavior?
3. How do digital transformation and entrepreneurial orientation impact to innovative
behavior?
4. How do organizational change impact to innovative behavior and competitive
advantage?
5. Why are the role of digital transformation and entrepreneurial orientations crucial?
1.4. Research Contribution
The novelty of this study is to provide OC determinants. The role of digital

transformation and entrepreneurial orientation of the OC process in PT Pegadaian that will
impact innovative behavior and competitive advantage. We propose the growing concept in
digital transformation and entrepreneurial orientation as the mechanism to fill the research
gaps mentioned in this chapter. Therefore, this study has the objective to contribute to the role
of digital transformation and entrepreneurial orientation in the OC process as organizational
11
and intangible resources within the branches of PT Pegadaian as unit analysis. Besides filling
the gap in OC research, the relationship between the OC process and innovative behavior can
also fill the gaps in OC literature about innovation performance in the industry 4.0 context that
is still limited.
In summary, the purpose of this study is to contribute to strategic management and
coupled OC area through investigating the role of digital transformation and entrepreneurial
orientation that leads to OC process activities and its consequences to facing industry 4.0,
innovative behavior, and competitive advantage. Furthermore, this study also sheds light on
implementing OC practice as integrated studies in four elements. Ahmad M. H. et al. said,
“Most researchers are focusing only on an item as their independent variable. Lack of
integrated studies resulted in less understanding in determining the critical and crucial factor
among the four elements. This study is also implementing the analysis of organization-level,
not only on an individual level. The studies investigate more on the group and organizational
level to provide findings that can be generalized across types of change content. Data
collection of this study is examining companies with multiple branches. These efforts are
trying to respond to Mohd Hafis Ahmad et al. (2018) research recommendation.
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CHAPTER II
LITERATURE REVIEW
2.1. Theoretical Map
Based on the Theory of The Growth, the firm is a bundle of resources, and firms
within the same industry are heterogeneous. Firm heterogeneities come from how the
resources endowed, develop, and combined, i.e., 1) type of resource collected, and 2) various
capabilities used to exploit them. Firms grow by exploiting excess resources in order to fulfill
productive opportunities (Penrose, 1959). Strategic management literature provides the
differential performance of firms in the same line of business (Peteraf 1993; Teece et al,
1997). The resource-based theory of the firm states that firms need valuable resources and
capabilities in order to attain competitiveness (Barney 1991).
On the other hand, firms succeed in competition because of their valuable resources.
Technological resources and organizational resources are the sources of growth that can be
used to grasp productive opportunities. This opportunity will create differential performance
and competitive advantage. The concept of firm performance in this study is relevant to
resource-based theory, Barney (1991), which explains about VRIN concept and as the pillar
of what Peteraf (1993) argues. It is four cornerstones of competitive advantage of the firm;
imperfect mobility (resources are not easily imitated or transferred), heterogeneity (the firm
has different resources), ex-post limits to competition (customer satisfaction), ex-ante limits
to competition (first-mover advantage). Entrepreneurial orientation and digital
transformation are an example of imperfect mobility because they are tacit, socially complex,
and rare. In the growth stage, Kogut & Zander (1992) mention that the knowledge of the
organization is categorized as the resource. Amit & Schoemaker (1993) divide the resource
and capabilities. Teece et al. (1997) state that the determinant of competitive advantage is a
dynamic capability.
According to Frank et al. (2019), the foundation for the growing research on the
interface in Industry 4.0 is mainly focused on adding value to the customer (demand-pull)
and frequently related to adding value to the process (technology-push). In industry 4.0, the
digital transformation of innovation and entrepreneurship is progress and also a challenge.
There are three major factors related to digitization; (1) openness, (2) affordances, and (3)
generativity. Beyond simply opening new opportunities for innovators and entrepreneurs,
digital technologies have broader implications for value creation and value capture
13
(Nambisan et al., 2019). Entrepreneurial orientation terms and definitions used for this study
are corporate entrepreneurial orientation. It is a strategic process that facilitates innovation.
This study refers to the Covin and Slevin (1998) definition. Several definitions of
Entrepreneurial orientation, as shown in figure 2.1 below.
Figure 2.1. Definition of Entrepreneurial Orientation
The effect of EO on strategic learning capability is supported by three conditions: (1)

structural organicity, (2) market responsiveness, and (3) strategy formation. These three
factors fully mediate the EO to create firm strategic learning capability (Anderson et al.,
2009). The role of learning capability, leadership, motivation, and productivity are important
factors in organizational change to cope with the fast-changing world. Organizational change
is an integrative process with all organizational elements such as human resources, systems,
and technologies being considered for successful change to occur (Appelbaum, 1998). The
external environment, organization vision and strategy, strategic organizational change
Initiative and change agents, change Process, leadership top and middle management,
14
learning, Individual and organizational performance are several aspects to enhancing firm
strategic organizational change (Appelbaum, 1998).
According to Bryan J Weiner (2009), Organizational change (OC) is a multi-level,
multi-faceted construct. As an organization-level construct, organizational change refers to
organizational members' shared resolve to implement a change (change commitment) and
shared belief in their collective capability to do so (change efficacy). The change process
divides into a change plan (Ghoshal & Bartlett, 1994), emergence plan (Weick, 1999), and
both plans and emergence can be used together (Andrew Pettigrew, 2000). Pettigrew studies
the linking Process between the change process to outcome. Structure, Process, and
boundaries are three mains crucial in the change process. Based on the existing OC research,
studies focusing on the comprehensive and detailed explanation of digital transformation and
entrepreneurial orientation role to organizational change (OC) concept are still limited (See
Table 2.1). There are several theoretical and empirical research of articles study determinants
of organizational change (OC) in large firms as well as SME (Iverson, 1996; Cunningham et
al., 2002; Jones et al., 2005), but limited studies that explore digital transformation and
entrepreneurial orientation as OC determinants (See Table 2.1).
According to Daniel T. Holt (2007) that organizational change is a multidimensional
construct influenced by beliefs among employees that (a) they are capable of implementing a
proposed change (i.e., change-specific efficacy), (b) the proposed change is appropriate for
the organization (i.e., appropriateness), (c) the leaders are committed to the proposed change
(i.e., management support), and (d) the proposed change is beneficial to organizational
members (i.e., personal valence). Past studies in organizational change have found several
factors that influence the level of organizational change and mostly defined as four elements
that influence organizational change, which are individual attributes, internal context, change
process, and change content (Shaul Oreg, Maria Vakola, and Achilles Armenakis, 2011).
Existing research on organizational change will be summarized in Table 2.1.
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Table 2.1 Summary of Existing Research on Organizational for Change (OC)
Sample
Author (year) Type of organization Type of change Research design composition Determinant
Amiot et al. (2006) Airlines Merger Longitudinal Pilots and Flight Change Process
Engineers
Armenakis et al. Medical Division; Durable Team-based culture Cross-sectional Admin.,
Goods Manufacturer; Public Company spinoff; technical,
(2007)
Service Organization Merger and sc Individual
ientific Attributes
employees
Armstrong-Stassen Fortune 100 company Downsizing Cross-sectional Clerical,
(1998) technicians, Individual
supervisors Attributes
Ashford (1988) Telecommunications company Company divestiture Cross-sectional Employees Individual
and longitudinal Attributes, IC, CP
Axtell et al. (2002) U.K.-based distribution company Technological change Longitudinal Managers, Change Process,
engineers, and IA
operators
Bartunek et al. Independent schools Empowerment Longitudinal Participants,
(1999) nonparticipants Change
and change Process
agents
Bartunek et al. Hospital Shared governance- Cross-sectional Nurses Individual
(2006) decentralization Attributes, CP
Begley and Czajka Hospital Divisional consolidation Longitudinal Individual
(1993) Attributes, IC
Bernerth et al. Automobile parts manufacturer Spin off from parent Cross-sectional Operative Individual
(2007) employees Attributes, IC, CP
Bhagat and Aircraft manufacturing company Transition to 4-day work Longitudinal Managers and Individual
Chassie (1980) week nonmanagers Attributes,
19
Author (year) Type of organization Type of change Research design Sampel Determinant
19
composition
Bordia et al. (2006) Hospital Restructuring, Cross-sectional Nurses, medical Change Process
privatization, relocation, staff
technological change
Bordia et al. (2004) Hospital Restructuring and Cross-sectional Staff members CP, IA
relocation
Bovey and Hede 9 different public/private sector Restructuring; Cross-sectional Employees Individual
attributes
(2001) organizations reorganization of
systems; technological
change
Caldwell et al. 34 work units in Extent of change, Cross-sectional Employees Change
Process, IA
(2004) 21 organizations, e.g., consequences of change,
transportation, technology, individual job impact
consumer products,
government
Cartwright and U.K. Building Societies Merger Cross-sectional Middle managers Individual
Cooper (1993) Attributes, IC
Coch and French Harwood Manufacturing Changes in work methods Field experiment Plant employees Change Process
(1948) Corporation and jobs IC
Covin et al. (1996) Fortune 500 company Merger Cross-sectional Employees
Coyle-Shapiro and U.K. supplier of electrical TQM program Longitudinal Employees Individual
Morrow (2003) components Attributes, IC
Coyle-Shapiro U.K. supplier of electrical TQM program Longitudinal Employees Individual

(1999) components Attributes, IC
20
Determinant
21
Determinant
22
Determinant
23
Determinant
24
Determinant
25
Determinant
26
Determinant
27
Sample
Author (year) Type of organization Type of change Research design composition Determinant
Walker et al. Auto parts manufacturer Spinoff Cross-sectional Operative IA, IC

(2007) employees
Wanberg and U.S. government agency Radical reorganization Longitudinal and Employees CP, IA, IC
Banas (2000) cross-sectional
Weber and Weber Fire department Organizational change Longitudinal Employees
(2001) under a new chief IA, Internal Context
Zalesny and Farace Governmental agency Open architecture office Longitudinal Employees IA, Change
(1987) Process
Note. TQM  Total Quality Management; IA = Individual Attributes; IC = Internal Context; CP= Change Process; CC= Change Content
28
The definition of innovative behavior is a process and activity performed continuously,

repeatedly, and in an extended period, resulting in a beneficial impact for a company. It will also
create a learning behavior for an organization to improve, self-review, and to adapt to the ever-
changing consumers’ needs in the time being and the future (Lianto et al., 2018). A complex
division of labor, an organic structure, and a high-risk strategy produce consistent findings relative
to organizational innovation (Hage, Jerald, 1999). The complexity of the division of labor is most
important because it taps the organizational learning, problem-solving, and creativity capacities of
the organization. Linking perspectives of organization learning, innovative behavior, and
intellectual capital will be creating a competitive advantage (Liu, Chih-Hsing, 2017). The
exploratory and exploitative learning, can open the door to capturing opportunity and competitive
advantage through increased innovative behavior and human capital accumulation. The intellectual
capital (IC) theory has also confirmed that social capital and relational capital will strengthen the
relationship between innovative behavior and human capital (Liu, Chih-Hsing, 2017).
In the field of strategic management, deals with the major intended and emergent initiatives
are usual. The unit leader will take the initiative on behalf of owners involving the utilization of
resources to enhance the performance of firms (Mintzberg & Waters, 1985). In the strategy process,
strategies are partly emergent, partly deliberate, and also partly deliberately emergent. The concept
of organizational change is relevant to the emergent strategy process (Mintzberg, 1978). The theory
developed in this study for the role of digital transformation and entrepreneurial orientation in
achieving performance through organizational change and innovative behavior in industry 4.0 is
presented in figure 2.2 below. This section will explain the theoretical map used for research model
development.
29
29
THEORY OF THE GROWTH

(Penrose, 1959)
Resource Based Theory (RBT)

P
(Barney, 1991) e
r
RESOURCES CONDUCT PERFORMANCE s
p
e
Tangible & Above Normal
c
Intangible Process Return (SCA) t
Resources
i
Stock Accumulation (Barney, 1991)
(Hall, 1993) v
e
Firm Resources Emergent Innitiative F

Mintzberg, 1978
Hall 1992, 1993; r
Barney, 1991;
Teece et al, 1997 a
Organizational
Change (OC)
Competitive m
Appelbaum et al., 1998 Advantage
Bryan J Weiner 2009; e
Organization Ghoshal & Bartlett, 1994; (Peteraf, 1993)
(Managerial) Resources Karl Weick, 1999; w
Andrew Pettigrew, 2000
Barney, 1991;
Hall, 1992;
o
Hall, 1993; Create VRIO
Ireland et al, 2003
r
Resources
(Barney, 1991) k
Entrepreneurial Orientation Organizational Change (OC)

(Anderson et al, 2009) (Appelbaum et al., 1998) Competitive Variable
Advantage Approach
Digital Transformation Innovative Behavior (Liu, Chih-Hsing, 2017)
(Nambisan et al, 2019) (Hage, Jerald, 1999)
Figure 2.2. Theoretical Map
CHAPTER III
RESEARCH MODEL & HYPOTHESIS
Drawing upon prior research, the drivers for organizational change in industry 4.0, used
for this research model, are a digital transformation and entrepreneurial orientation. Digital
transformation and entrepreneurial orientation as the company’s essential resources. Digital
transformation as technological resources and entrepreneurial orientation as managerial
resources (Hall, 1992; Ireland et al 2003) that every organization should have. Digital
transformation and entrepreneurial orientation are vital for organizational change (OC) process
activities. Digital transformation and entrepreneurial orientation can also create innovative
behavior directly. Therefore, organizational change is crucial to be conducted to create a
competitive advantage through innovative behavior capability. As a result, a competitive
advantage as an outcome will be developed over time.
In the commercialization stage, organizational change can also derive innovative
behavior. On the other hand, innovative behavior as capability will create a competitive
advantage. In this case, organizational change is a process and ability that positively affect
competitiveness. The logics above provide the reason why the digital transformation and
entrepreneurial orientation as a driver for organizations to have OC that commonly will also
have innovative behavior capability and competitive advantage. A more detailed explanation
will be presented through research hypothesis development in chapter 3.1.
3.1. Hypothesis Development

Based on the Organizational change (OC) framework as well as the variables discussed
in chapter 2.4, in this section, the research hypothesis is developed based on the previous study
in OC literature. The research model is presented in figure 3.1. In this model, digital
transformation and entrepreneurial orientation perform as the determinant of organizational
change (OC) and innovative behavior, and competitive advantage are a consequence of
organizational change. Therefore, in this context, we formalize the circumstances into
hypothesis as follow:
30
31
31
Organizational
Change
Figure 3.1. Research Model and Variable Operationalization

32
Hypothesis 1: There are a correlation and positive impacts that indicate the extent to which
digital transformation will improve organizational change.
Digital transformation is a critical issue in Industry 4.0 that every company should catch up
with and has a ready to cope attitude. Nambisan et al. (2019) studies argue that digital technologies
have broader implications in improving organizational change in enhancing value creation and
value capture. In terms of who can participate or the actors, what they can contribute (inputs), how
they can contribute (process), and to what ends (outcomes). These studies also describe action
possibilities offered by an object (e.g., digital technology) in relation to a specific user (or use
context) in innovation and entrepreneurship. The digital transformation framework (DTF)
represents the first step in this direction. Matt C. Hess and Benlian, A. (2015) explain the conceptual
framework for formulating a digital transformation strategy for the firm to update and make a
significant organizational change to improve performance. According to Hess and Berlian (2015),
there are four dimensions of every digital transformation endeavor to follow. There are: (1) The
use of technologies that reflects a firm’s approach and capability to explore and exploit new digital
technologies (2) Change in value creation that reflects the influence of digital transformation on a
firm’s value creation (3) Structural changes refer to the modifications in organizational structures,
processes, and skillsets that are necessary to cope with and exploit new technologies (4) The
financial dimension relates to both a firm’s need for action in response to a struggling core business
as well as its ability to finance a digital transformation endeavor.
entrepreneurial orientation will improve organizational change.
Entrepreneurial orientation (EO) is a firm-level strategic orientation that captures an

organization's strategy-making practices, managerial philosophies, and firm behaviors that are
entrepreneurial in nature. According to Covin and Slevin (1998), entrepreneurial firms are those in
which the top managers have entrepreneurial management styles, as evidenced by the firms'
strategic decision and operating management philosophies. Non-entrepreneurial or conservative
firms are those in which the top management style is decidedly risk-averse, non- innovative, and
passive or reactive. Innovativeness, proactiveness, and risk-taking are the three dimensions for EO
(Covin, 2011). A company that has entrepreneurial orientation will improve organizational change
to cope in the digital era and industry 4.0 nowadays.
33
Hypothesis 3: There are a correlation and positive impacts that indicate the extent to which digital
transformation will improve innovative behavior.
Digital transformation will improve innovative behavior. The impact of digital transformation
directly to innovative behavior is lower than digital transformation through organizational change.
Digital transformation is not just about embracing new technology, and it is about a change in thought
and organization behavior (Nambisan et al., 2019). There is a need for organizations to address the
change in business scenarios, dynamic business demands, and innovate ways to cater to these changing
needs quickly. Leaders and IT teams in any enterprise should work hand in hand to meet the business
requirements, drive innovation, and march towards continuous improvement (Nambisan et al., 2019).
This is what Digital transformation is all about, to accelerate business activities, lower cost, improve
time to market, bring about a positive change in processes, people, and competency of new business
models as well (Nambisan et al., 2019). With this activity and process, digital transformation will
induce innovative behavior that, in the end, will impact competitive advantage.
entrepreneurial orientation will improve innovative behavior.
Entrepreneurial orientation will improve innovative behavior. The impact of

entrepreneurial orientation directly to innovative behavior is lower than entrepreneurial
orientation through organizational change. This is because entrepreneurial orientation (EO) by its
dimensions: innovativeness, proactiveness, and risk-taking (Covin, 2011) have a strong influence
on the creation of organizational change innovation. Entrepreneurial activity will improve
innovative behavior and as the determinant of performance and success in the service sector
(Omerzel, 2016; Rattanawong & Suwanno, 2014). Thereby, excellent service to the customer can
be created when an organization makes an effort to develop innovation to achieve a competitive
advantage. Even though an organization may find hardship in predicting the actions of
competitors in an unstable environment, it has been proven that the organization is able to respond
to environmental change by adopting entrepreneurial characteristics as their strategy (Covin &
Slevin, 1991). To anticipate the turbulence environment, the organization needs to adopt
entrepreneurial orientation, which is attitude and behavior tendencies to engage in entrepreneurial
characteristics such as innovativeness, proactiveness, and risk-taking in order to identify
opportunities as a strategy to boost innovative behavior (Kraus, 2013).
34
Entrepreneurial behavior directs the creation of innovation. Therefore, innovation in the
service sector is strongly influenced by entrepreneurial orientation. As stated by Avlonitis and
Salavou (2007), innovation is inherent in the area of entrepreneurship. Morris et al. (2008) also
affirmed that entrepreneurship related to innovation or creating new combinations of resources,
opportunities, risk-taking, profit-making, and value creation. Based on the recent empirical
studies by some researchers such as Kraus (2013), Nasution et al. (2011), Wang and Juan (2015),
Omerzel (2016), Rattanawong and Suwanno (2014), MonteagudoandMartínez (2015),
entrepreneurial orientation has a significant relationship with innovation in the service sector. The
dimensions or characteristics of entrepreneurial orientation influence the ability to create an
innovation.
Hypothesis 5: There are a correlation and positive impacts that indicates the extent to which
organizational change will improve competitive advantage
Improving business performance can be prepared by assessing the organizational change
and started from a functional manager to prepare the operational unit for the change (Ramani S.,
2006). This activity and processes focus on the four main dimensions of OC; Appropriateness,
management Support, change efficacy, and personally beneficial (Armenakis et al., 1993;
Armenakis et al., 2008). Appropriateness is an organizational readiness for change, from financial
dimension to appropriateness in the short term and longterm vision from the organization.
Management support is a motivational force for change include programs that need to be improved,
training for employees, regulation, and funding. Management support includes the institutional and
adequacy of resources, such as physical office space available, number of staffing, training
resources, computer access, and E-communication, which should be available and adequate to
improve competitive advantage. Research on staff attributes and managerial coping (Judge et al.,
1999), professionalism (Bartol, 1979; Hall, 1968), and behavioral change models (Fishbein, 1995)
converge on similar dimensions of management support that influence organizational change.
Change efficacy is organizational members' shared beliefs in their joint ability to engage the action
necessary to implement a change. Change efficacy such as staff cohesiveness, staff autonomy, the
openness of communication, stress measures, and openness to change will improve and impact
competitive advantage. Personally beneficial factors involve growth measure for individual skills,
staff efficacy measurement, influence from the leader, and adaptability from staff to adapt to a
changing environment. These four key factors will impact a high commitment from the organization
starts from the top management to the whole employee will impact the higher performance from
the unit and, in the end, will impact the whole operations to enhance competitive advantage.
35
Hypothesis 6: There are a correlation and positive impacts that indicates the organizational
change extent to which will improve innovative behavior
Organizational change will improve innovative behavior (Hage, Jerald, 1999). The four main
dimensions of OC are Appropriateness, Management Support, Change Efficacy, Personally
Beneficial (Armenakis et al., 1993; Armenakis et al., 2008). This interaction between OC,
innovative behavior, and its context are very complicated. The role of organizations in promoting
and embedding innovation needs to be adapted as well as implemented overtime and through good
governance and supported by top management leadership and organizational learning (Appelbaum,
Normand & William, 1998). Adopted into organizational contexts and receptive climates for
innovation can only be developed incrementally over time. Key organizational strategies for
embedding innovation include the development of incentives, sophisticated knowledge
management; inter-functional and inter-organizational coordination and collaboration; and
development of innovation infrastructure.
Hypothesis 7: There are a correlation and positive impacts that indicates the extent to which
innovative behavior will improve competitive advantage
Innovative behavior will improve competitive advantage (Liu, Chih-Hsing, 2017).
Employee performance improves firm performance indirectly through innovation as an employee
generates ideas for new products or services to improve the competitiveness of the firm (SadiNoglu
& Zehir, 2010). Examples of innovative behavior as an administrative include the implementation
of new policies of recruitment, allocating resources, and reward. Individual innovative behaviors
could be behaviors pertaining to the introduction or implementation of both technical and
administrative innovations. Innovative behavior can be defined as intentional generation,
promotion, and realization of new ideas within a work role, group, or organization (Carmeli and
Spreitzer 2009). This is apparent as the base of a knowledge economy where intangible assets
(Hall, 1993) are commodities that play an ever more significant role in the organization, such as
abilities to enhance competitiveness by "doing more with less" (Carmeli and Spreitzer 2009;
Crossan and Apaydin 2010; Scott and Bruce 1994). Being an innovative person means doing things
differently or doing things that have never been done before. Top management and employee that
has innovative behavior is always has embraced the idea and creates environments in which the
tools and resources are given to challenge the status quo, push boundaries, and achieve growth.
This innovative behavior will foster creativity in which top management and employee will
improve the performance with creating new service or product lines, cost efficiency, enhance
knowledge and skills at the end will improve a firm's competitive advantage from this positive
behavior.
36
CHAPTER IV
RESEARCH METHODOLOGY
The purpose of this research is to examine the digital transformation and entrepreneurial
orientation as the determinants of organizational change process that creates innovative behavior
and competitive advantage. Thus, in this section, the researcher describes the research
methodologies to conduct the study. Furthermore, in section 4.1, the researcher will explain the
sample criteria that valid to measure a firm that has digital transformation and entrepreneurial
orientation as their resources, conducted OC, and performs innovative behavior, in the end, the
competitive advantage as an output. In this study, the researcher uses an administrated
questionnaire-based quantitative study with primary data to test the hypothesis developed in
section 3.1. The theoretical gaps are identified in the literature review phase. Some data and
information are also collected from the secondary data, such as media as well as the firm website.
The questionnaires in this study are developed by using the measurement items from the previous
study. The researcher will also combine questionnaires to make relevant with the research context
about digital transformation and entrepreneurial orientation as OC determinants. As the initial step
of the study, the researcher will conduct an interview with a leader from PT Pegadaian to examine
whether the developed constructs as well as the indicators are happened in the respondent firm
and also examine the questionnaires, are well understood.
4.1 Unit of Analysis
In order to examine the digital transformation and entrepreneurial orientation as

organizational change determinants, we choose the personnel of the PT Pegadaian Branch Head
from a highly competitive and turbulence branch. Mostly, branches from the capital of the
Indonesian provinces as unit analysis for this study. There are two types of PT Pegadaian branches.
In this study, the sample will use 150 branches of PT Pegadaian conventional type with highly
competitive market conditions, as shown in table 4.2.
Table 4.1. Branches List PT Pegadaian in Indonesia
(pegadaian.co.id, 2019)
Column Labels
KOTA Konvensional Konvensional Total Syariah Syariah Total Pusat Pusat Total Grand Total
<50 >50 <50 >50 <50
Bali 136 136 5 5 141
Bangka Belitung 16 16 1 1 17
Banten 18 100 118 5 25 30 148
Bengkulu 17 17 4 4 21
DI Yogyakarta 60 60 8 8 68
DKI Jakarta 49 293 342 10 37 47 1 1 390
Gorontalo 22 22 5 5 27
Jambi 47 47 12 12 59
Jawa Barat 222 243 465 53 44 97 562
Jawa Tengah 256 64 320 32 12 44 364
Jawa Timur 346 63 409 34 21 55 464
Kalimantan Barat 81 81 9 9 90
Kalimantan Selatan 39 39 7 7 46
Kalimantan Tengah 25 25 3 3 28
Kalimantan Timur 115 51 166 14 6 20 186
Kepulauan Riau 82 82 16 16 98
Lampung 49 49 9 9 58
Maluku 27 27 2 2 29
Maluku Utara 16 16 7 7 23
N/A 1 1 1
Nanggroe Aceh Darussalam (NAD) 61 61 61
Nusa Tenggara Barat (NTB) 176 176 28 28 204
Nusa Tenggara Timur (NTT) 87 87 5 5 92
Papua 42 42 4 4 46
Papua Barat 25 25 3 3 28
Riau 58 58 17 17 75
Sulawesi Barat 23 23 2 2 25
Sulawesi Selatan 183 84 267 29 10 39 306
Sulawesi Tengah 51 51 11 11 62
Sulawesi Tenggara 42 42 9 9 51
Sulawesi Utara 98 98 12 12 110
Sumatera Barat 43 43 8 8 51
Sumatera Selatan 76 76 14 14 90
Sumatera Utara 123 84 207 13 5 18 225
Grand Total 2651 982 3633 452 160 612 1 1 4246

38
Table 4.2. Unit Analysis of Branches List PT Pegadaian in Indonesia
(pegadaian.co.id, 2019)
4.2 Operationalization of Variables
The operationalization of variables as shown in figure 4.1. The researcher will develop
the questionnaire based on the previous literature that has been adjusted with the research
context. The Six Likert Scale will be used to avoid a neutral answer (Wakita, Ueshima, and
Noguchi, 2012). Then, the pre-test will be conducted. The objective of the pre-test is to
examine the reliability as well as the construct of the scales used for the latent variable
indicators.
40
40
Operationalization of Variables
INO 1-7 PRO 1-5 RTA 1-6
Organizational
Organizational
UTE 1-6
Readiness
Innovative Competitive
Change
for Change Behavior Advantage
CVC 1-15
SCH 1-13
FD 1-5
APO 1-10 MSU 1-6 CEF 1-6 PBE 1-3
Figure 4.1. Operationalization of Variables

41
41
Sample of Construct Measurement
Constructs Dimensions Indicators and Coding Sources

The use of technologies UTE1: Our company has IT which serves as the
Digital Transformation main driver for achieving strategic goals Matt, Christian; Hess, Thomas;
Definition: “The use of technologies UTE2: Our company has an IT that functions as a Benlian, Alexander; and Wiesbock,
Definition: “Digital reflects a firm's approach and support to achieve strategic goals Florian (2016) "Options for
transformation is a capability to explore and exploit new UTE3: Our company is always at the forefront Formulating a Digital Transformation
complex issue that affects digital technologies.” (Matt, of innovating using new technology Strategy," MIS Quarterly Executive:
many or all segments Christian et, al., 2016:3) UTE4: Our company is always actively looking Vol.15: Iss.2, Article 6.
within a company. for opportunities to implement new
Managers have to technologies.
simultaneously balance UTE5: Our company does not rely on the latest
the exploration and digital technology
exploitation of their firms'
resources to achieve Change in value creation CVC1: Our company has been able to distribute
organizational agility--a products through digital applications to
necessary condition for the Definition: “Changes in value creation serve customers
successful transformation reflects the influence of digital CVC2: Our company already uses digital
of their businesses.” transformation on a firm’s value channels as a support for basic products
(Matt, Christian et, al., creation.” (Matt, Christian et, al., / main products
2016:3) 2016:3) CVC3: Our company is doing digital innovation
on basic products / main products
CVC4: Our company offers products using new
content through digital platforms
CVC5: Our company offers new products,
without being associated with content
(analog / digital)
CVC6: Our company can already generate
income from customers who access or
use content from digital applications
Structural Change SCH1: The CEO is the most responsible officer
to drive the success of digital
Definition: “Structural changes refer transformation in our company.
to the modifications in organizational SCH2: The Regional Head is the most
structures, processes and skill sets responsible official to drive the success
that are necessary to cope with and of digital transformation in our
exploit new technologies.” (Matt, company.
Christian et, al., 2016:3) SCH3: The Head of the Digital Business
41
42
Division is the most responsible officer
to drive the success of digital
transformation in our company.
SCH4: The Head of the IT Division is the most
responsible officer to drive the success
of digital transformation in our
company.
SCH5: In our opinion, the digital operational
system is fully integrated into the
current organizational structure of the
company.
SCH6: In our opinion, the digital operational
system is implemented separately from
the main business.
Financial Dimension FDI1: In our opinion, digital technology will
not erode the profits from our
Definition: “The financial dimension company's core business
relates to both a firm’s need for action FDI2: In our opinion, digital technology will
in response to a struggling core affect the profits of the core business,
business as well as its ability to but our company's core business will
finance a digital transformation
still be profitable
endeavor.” (Matt, Christian et, al.,
2016:3) FDI3: In our opinion, digital technology will
erode our company's profits.
FDI4: In our opinion, companies can finance
their own digital transformation
processes.
FDI5: In our opinion, companies need funding
from outside parties, to finance the
digital transformation process.
42
Entrepreneurial Orientation Innovativeness INO1: The branch heads in our company optimally Covin, J.G. & Slevin D.P. (1998);
support marketing activities for products and Miller, D. (1983)
Definition: “Entrepreneurial services that have been excellent so far
firms are those in which the top Definition: “Innovativeness INO2: The branch heads in our company develop
managers have entrepreneurial refers to the exhibition of products and services through R&D, commit to
management styles, as evidenced experimentation, exploration, technological facilities, and innovation
by the firms’ strategic decisions and creative acts as reflected in, INO3: In our opinion, there is no new product or service
and operating management for example, new line that has been marketed in the last five years
philosophies. Non- products/services, new process INO4: In our opinion, changes in product or service lines
entrepreneurial or conservative are mostly minor / very little that has been
technologies, new methods of
firms are those in which the top marketed by PT Pegadaian in the last five years
operation, and new business
management style is decidedly INO5: In our opinion, very many new product or service
strategies.” (Miller, 1983: 773) lines have been marketed by PT Pegadaian in the
risk- averse, non-innovative, and
passive or reactive.” (Covin and last five years
Slevin, 1998: 218) INO6: In our opinion, changes in product or service lines
are usually quite dramatic (sudden)
INO7: In dealing with competitors, our company
usually responds to actions taken by
competitors
Proactiveness PRO1: In dealing with competitors, our company

usually initiates actions that are then responded
Definition: “Proactiveness refers to by competitors
to engaging in forward- PRO2: In dealing with its competitors, our company is
looking actions targeted at the rarely the first to introduce new products/
exploitation of opportunity in services, administrative techniques, operating
anticipation of future technology, and so on.
circumstances, as would be PRO3: In dealing with its competitors; our company is
typical of firms that lead and/or very often the first to introduce new products/
pre-empt the actions of others services, administrative techniques, operating
(e.g., market pioneers, early technology, and others
adopters of new technologies)” PRO4: In dealing with its competitors, our company
(Miller, 1983: 774) usually tries to avoid competitive clashes,
preferring not to compete.
42
PRO5: In dealing with competitors, our company usually
always wants to beat competitors and be very
competitive.
Risk-Taking RTA1: In general, branch heads in our company have a

strong tendency to undertake low-risk projects
Definition:“Risk-taking refers to (with normal and certain returns).
a willingness to commit RTA2: In general, branch heads in our company have a
resources to projects, ideas, or strong tendency to undertake high-risk projects
processes whose outcomes are (with very high chance of return).
uncertain and for which the cost RTA3: In general, branch heads in our company believe
of failure would be high.” that, according to the company's character, it is
(Miller, 1983:773) best to carry out new projects gradually and
carefully
RTA4: In general, branch heads in our company believe
that, according to the company's character, bold
and comprehensive actions are needed to achieve
the company's goals
RTA5: When faced with a decision-making situation that
involves uncertainty, our company usually
adopts an "wait-and-see" precautionary element
to minimize the possibility of making wrong
decisions and adverse decisions
RTA6: When faced with a decision-making situation that
involves uncertainty, our company usually takes
very bold and aggressive steps to maximize and
take advantage of opportunities
43
Organizational Appropriatness APO1: We think that an organization will (Armenakis, Harris, & Mossholder,
Readiness for Change benefit from this change 1993; Backer, 1995; Hage & Aiken,
Definition: “Appropriateness is an APO2: It makes no sense for us to start 1966; Pond, Armenakis, & Green, 1984).
Definition: organizational readiness for change, from this change. (Lehman WE, et, al., 2002:207); Weiner,
“ Organizational financial dimension to appropriateness in APO3: There is a valid reason for us to Bryan J. (2009); Klein KJ, Kozlowski
Readiness for change the short term and long term vision from make this change. (2000);
change is a multilevel the organization. Appropriatness forces for APO4: This change will increase the
construct. change are complex but include overall efficiency of our organization
Organizational change perceptions of current status in regard to APO5: There are a number of rational
assessment and services as well as reasons for making this change.
can be more or less
organizational functioning.” “Three areas APO6: In the long run, we feel it will be
present at the
important: Program need for improvement, beneficial for us if the organization
individual, group, unit, adopts this change
department, or Training needs, Pressure for change”
organizational level. (Armenakis, Harris, & Mossholder,
Organizational change 1993; Daniel T. Holt, 2007)
can be theorized,
Management Support MSU1: Our senior leaders have encouraged
assessed, and studied at
Definition: “Management support is a all employees to accept this
any of these levels of change.
motivational force for change includes
analysis. However, the institutional and adequacy of MSU2: The main decision makers of our
organizational change resources, such as physical office space organization have given all their
is not a homologous available, number of staffing, training support behind this change effort.
multilevel construct.” resources, computer access, and E- MSU3: Every Senior Manager has
(Weiner, Bryan J., emphasized the importance of this
communication, which should be
2009:67). change
available and adequate to improve MSU4: The most senior leaders of our
competitive advantage. Research on staff organization are committed to this
attributes and managerial coping (Judge change.
et al., 1999; Armenakis, et al, 1993; MSU5: We think we have spent a lot of
Hage & Aiken, 1966) time on this change, when Senior
Managers don't even want it to be
implemented.
MSU6: Management has sent a clear signal
that this organization will change.
43
Change Efficacy CEF1: We do not anticipate problems
adjusting to the work we will have
Change efficacy refers to organizational when this change is adopted.
members' shared beliefs in their joint CEF2: There are some tasks that will be
ability to engage the action necessary to needed when there are changes that
we did not think we would be able
implement a change. Change efficacy
to do well.
factors such as staff cohesiveness, staff CEF3: When we implemented this change,
autonomy, the openness of we felt we could handle it easily
communication, stress measures, and CEF4: We have the skills needed to make
openness to change will improve and this change successful.
impact competitive advantage. CEF5: When we set our mind to
(Armenakis, Harris, & Mossholder, something, we can learn that will
1993; Daniel T. Holt, 2007) be needed when this change is
implemented.
CEF6: Our past experience makes us
confident that we will be able to do
it successfully after this change is
made.
Personally Beneficial PBE1: We worry that we will lose some of

Definition: Personally beneficial factors our status in the organization when
involve growth measure for individual skills, this change is applied.
staff efficacy measurement, influence from PBE2: This change will disrupt many of the
the leader, and adaptability from staff to personal relationships that we have
adapt to a changing environment. These four developed.
key factors will impact a high commitment PBE3: Our future in this work will be
from the organization starts from the top limited because of this change.
management to the whole employee will
impact the higher performance from the unit
and, in the end, will impact the whole
operations to enhance competitive advantage.
(Armenakis, Harris, & Mossholder, 1993;
Daniel T. Holt, 2007)
44
IBE1: We pay great attention to the Carmelli, Meitar & Weisberg (2006);
Innovative behavior Definition: “Innovative behavior can be development of innovation in the Carmeli and Spreitzer 2009; Crossan and
defined as “intentional generation, area that our lead, such as the search Apaydin 2010; Scott and Bruce 1994).
promotion, and realization of new ideas for new methods, new solutions or
within a work role, group, or organization” new types of services.
“This is apparent as the base of a knowledge IBE2: We always emphasize the
economy where intangible assets are importance of innovation for
commodities that play an ever more
company development.
significant role in the organization, such as
abilities to enhance competitiveness by IBE3: We propose an innovation
“doing more with less” (Carmeli and development plan in the area that I
Spreitzer 2009; Crossan and Apaydin 2010; lead
Scott and Bruce 1994). IBE4: We promote the need for
development and utilization of new
resources
IBE5: We encourage the development and
implementation of innovations in the
Area that our lead
IBE6: Our always try to find solutions to
problems faced by customers
through innovation efforts.
Competitive CA1: What is the percentage of OSL (Bourne, Neely, Mills & Platts 2003;
advantage Definition: “A business competitive (Outstanding Loans) target Forza & Salvador, 2000)
advantage measurement system refers to the
use of a multi-dimensional set of performance acceptance for all products and
measures for the planning and management of services in January-March 2020
a business” “Mainly fulfilling two primary CA2: What is the percentage of market
functions: the first one consists in enabling share for all products and services
and structuring communication between all in January-March 2020
the organisational units (individuals, teams, CA1: What is the percentage of new
processes, functions, etc.) involved in the product and service for all
process of target setting. The second one is products and services in January-
that of collecting, processing and delivering
information on the performance of people, March 2020
activity.” (Forza & Salvador, 2000)
44
Questionnaire
REF NO PERTANYAAN
Perusahaan saya memiliki IT yang berfungsi sebagai penggerak utama

Q3-1.1. 1
untuk mencapai tujuan strategis
Perusahaan saya memiliki IT yang berfungsi sebagai pendukung untuk

Q3-1.2. 2
mencapai tujuan strategis.
Perusahaan saya selalu terdepan dalam berinovasi menggunakan
Q3-1.3. 3
teknologi baru.
Perusahaan saya selalu aktif mencari peluang untuk menerapkan teknologi
Q3-1.4. 4
baru.
Q3-1.5. 5 Perusahaan saya tidak mengandalkan pada teknologi digital terbaru
Perusahaan saya sudah dapat mendistribusikan produk melalui aplikasi
Q3-2.1. 6
digital untuk melayani para nasabah
Perusahaan saya sudah menggunakan saluran digital sebagai pendukung
Q3-2.2. 7
dari produk dasar/ produk utama.
Perusahaan saya melakukan inovasi digital terhadap produk dasar/ produk
Q3-2.3. 8
utama
Perusahaan saya menawarkan produk menggunakan konten baru melalui
Q3-2.4. 9
platform digital.
Perusahaan saya menawarkan produk baru, tanpa dikaitkan dengan
Q3-2.5. 10
konten (analog/digital).
Perusahaan saya sudah dapat menghasilkan pendapatan dari nasabah
Q3-2.6. 11
yang mengakses atau menggunakan konten dari aplikasi digital
Perusahaan saya sudah dapat menghasilkan pendapatan dari add-ons

Q3-2.7. 12
yang berbasis dari aplikasi gratis yang digunakan oleh nasabah (freemium).
Perusahaan saya sudah dapat menghasilkan pendapatan dari iklan pada

Q3-2.8. 13
aplikasi gratis yang digunakan oleh nasabah.
Perusahaan saya sudah dapat menghasilkan pendapatan dari produk

Q3-2.9. 14
komplementari melalui aplikasi yang digunakan oleh nasabah.
Dimasa mendatang, lingkup bisnis digital perusahaan saya akan mencakup

Q3-2.10. 15
pembuatan konten (analog/digital).
Q3-2.11. 16
kumpulan konten (analog/digital).
Q3-2.12. 17
distribusi konten (analog/digital).
48
44

Q3-2.13. 18
platform manajemen konten.
Q3-2.14. 19
model bisnis lainnya.
Dirut adalah pejabat yang paling bertanggungjawab untuk mendorong
Q3-3.1. 20
keberhasilan transformasi digital di perusahaan saya.
Kepala Wilayah adalah pejabat yang paling bertanggungjawab untuk

Q3-3.2. 21
mendorong keberhasilan transformasi digital di perusahaan saya.
Kepala Divisi Bisnis Digital adalah pejabat yang paling bertanggungjawab

Q3-3.3. 22
untuk mendorong keberhasilan transformasi digital di perusahaan saya.
Kepala Divisi IT adalah pejabat yang paling bertanggungjawab untuk

Q3-3.4. 23
mendorong keberhasilan transformasi digital di perusahaan saya.
Menurut saya, sistem operasional secara digital sepenuhnya
Q3-3.5. 24
diintegrasikan ke dalam struktur organisasi perusahaan saat ini.
Menurut saya, sistem operasional secara digital diimplementasikan secara
Q3-3.6. 25
terpisah dari bisnis utama pegadaian.
Menurut saya, akan terjadi perubahan produk dan jasa, dalam operasional
Q3-3.7. 26
pelayanan kepada nasabah.
Menurut saya, akan terjadi perbaikan dalam proses bisnis pada pelayanan
Q3-3.8. 27
kepada nasabah.
Menurut saya, akan dibutuhkan keahlian baru berbasis teknologi digital
Q3-3.9. 28
untuk melayani nasabah.
Menurut saya, perusahaan akan mengandalkan sumberdaya yang sudah
Q3-3.10. 29
ada, dalam melakukan transformasi digital.
Menurut saya, perusahaan akan membangun kemitraan dengah pihak
Q3-3.11. 30
lain, dalam melakukan transformasi digital.
Menurut saya, perusahaan akan mengambil alih sumberdaya yang
Q3-3.12. 31 menguasai keahlian baru dari pihak luar untuk melakukan transformasi
digital.
Menurut saya, perusahaan akan menambah sumber daya yang menguasai
Q3-3.13. 32
keahlian baru dari pihak luar untuk melakukan transformasi digital.
Menurut saya, teknologi digital tidak akan mengikis keuntungan dari bisnis
Q3-4.1. 33
inti perusahaan saya
Menurut saya, teknologi digital akan mempengaruhi keuntungan dari
Q3-4.2. 34 bisnis inti, namun bisnis inti perusahaan saya, akan tetap
menguntungkan.
Menurut saya, teknologi digital akan mengikis keuntungan perusahaan
Q3-4.3. 35
saya.
Menurut saya, perusahaan dapat membiayai sendiri proses transformasi
Q3-4.4. 36
digital.
Menurut saya, perusahaan memerlukan pendanaan dari pihak luar, untuk
Q3-4.5. 37
membiayai proses transformasi digital.
49
44
Secara umum, top managers/ Kepala cabang di perusahaan saya

Q4-1.1. 38 mendukung secara maksimal kegiatan marketing untuk produk dan jasa
yang telah menjadi unggulan selama ini
Top managers/ Kepala cabang di perusahaan saya melakukan
Q4-1.2. 39 pengembangan produk dan jasa melalui R&D, berkomitmen pada fasilitas
teknologi, dan inovasi
Menurut saya, tidak ada lini produk atau layanan baru yang telah
Q4-1.3. 40
dipasarkan PT Pegadaian dalam lima tahun terakhir
Menurut saya, perubahan lini produk atau layanan sebagian besar bersifat
Q4-1.4. 41 minor/ sangat sedikit yang telah dipasarkan PT Pegadaian dalam lima
tahun terakhir
Menurut saya, sangat banyak lini produk atau layanan baru yang telah
Q4.1.5. 42
dipasarkan PT Pegadaian dalam lima tahun terakhir
Menurut saya, perubahan lini produk atau layanan biasanya cukup
Q4.1.6. 43
dramatis (dilakukan secara tiba-tiba)
Dalam berurusan dengan para pesaingnya, perusahaan saya biasanya
Q4.1.7. 44
menanggapi tindakan yang dilakukan oleh pesaing
Q4.2.1. 45
memulai tindakan yang kemudian direspon oleh pesaing
Dalam berurusan dengan para pesaingnya, perusahaan saya jarang sekali
Q4.2.2. 46 sebagai yang pertama untuk memperkenalkan produk/ layanan baru,
teknik administrasi, teknologi operasi, dan lain-lain.
Dalam berurusan dengan para pesaingnya, perusahaan saya sangat sering
Q4.2.3. 47 sebagai yang pertama untuk memperkenalkan produk / layanan baru,
teknik administrasi, teknologi operasi, dan lain-lain.
Q4.2.4. 48 berusaha menghindari bentrokan kompetitif, lebih memilih tidak
berkompetisi.
Q4.2.5. 49
selalu ingin mengalahkan pesaing dan sangat kompetitif.
Secara umum, top managers/ Kepala cabang di perusahaan saya memiliki

Q4.3.1. 50 kecenderungan yang kuat untuk melakukan proyek-proyek berisiko
rendah (dengan tingkat pengembalian yang normal dan tertentu).
Secara umum, top managers/ Kepala cabang di perusahaan saya memiliki

Q4.3.2. 51 kecenderungan yang kuat untuk melakukan proyek-proyek berisiko tinggi
(dengan peluang pengembalian sangat tinggi).
Secara umum, top managers/ Kepala cabang di perusahaan saya percaya

Q4.3.3. 52 bahwa, sesuai dengan karakter perusahaan, yang terbaik adalah
melakukan proyek-proyek baru secara bertahap dan secara berhati-hati.
50
44
Secara umum, top managers/ Kepala cabang di perusahaan saya percaya

Q4.3.4. 53 bahwa, sesuai dengan karakter perusahaan, tindakan yang berani dan
menyeluruh diperlukan untuk mencapai tujuan perusahaan.
Ketika dihadapkan dengan situasi pengambilan keputusan yang

melibatkan ketidakpastian, perusahaan saya biasanya mengadopsi unsur
Q4.3.5. 54
kehati-hatian “wait-and-see” untuk meminimalkan kemungkinan
membuat keputusan yang salah dan keputusan yang merugikan.
Ketika dihadapkan dengan situasi pengambilan keputusan yang

melibatkan ketidakpastian, perusahaan saya biasanya mengambil langkah
Q4.3.6. 55
yang sangat berani dan agresif untuk memaksimalkan dan memanfaatkan
peluang yang ada.
Kami pikir bahwa sebuah organisasi akan mendapatkan keuntungan dari
Q5-1.1. 56
perubahan ini
Q5-1.2. 57 Tidak masuk akal bagi kami untuk memulai perubahan ini.
Q5-1.3. 58 Ada alasan sah bagi kami untuk melakukan perubahan ini.
Q5-1.4. 59 Perubahan ini akan meningkatkan efisiensi keseluruhan organisasi kami.
Q5-1.5. 60 Ada sejumlah alasan rasional untuk melakukan perubahan ini.

Dalam jangka panjang, Kami merasa akan bermanfaat bagi kami jika
Q5-1.6. 61
organisasi mengadopsi perubahan ini.
Q5-1.7. 62 Perubahan ini membuat pekerjaan kami lebih mudah.
Ketika perubahan ini diterapkan, kami tidak percaya ada sesuatu yang bisa
Q5-1.8. 63
kami peroleh.
Waktu yang kita habiskan untuk perubahan ini harus dihabiskan untuk
Q5-1.9. 64
sesuatu yang lain.
Q5-1.10. 65 Perubahan ini sesuai dengan prioritas organisasi kami.
Para pemimpin senior kami telah mendorong semua karyawan untuk
Q5-2.1. . 66
menerima perubahan ini.
Pembuat keputusan utama organisasi kami telah memberikan semua
Q5-2.2. 67
dukungan mereka di balik upaya perubahan ini.
Q5-2.3. 68 Setiap Manajer Senior telah menekankan pentingnya perubahan ini.
Pemimpin paling senior organisasi kami berkomitmen untuk perubahan

Q5-2.4. 69
ini.
Kami pikir telah menghabiskan banyak waktu untuk perubahan ini, ketika
Q5-2.5. 70
para Manajer Senior bahkan tidak ingin untuk diterapkan.
Manajemen telah mengirim sinyal yang jelas bahwa organisasi ini akan
Q5-2.6. 71
berubah.
Kami tidak mengantisipasi adanya masalah menyesuaikan dengan
Q5-3.1. 72
pekerjaan yang akan kami miliki ketika perubahan ini diadopsi.
51
44
Ada beberapa tugas yang akan diperlukan ketika ada perubahan yang
Q5-3.2. 73
sebelumnya tidak kami pikirkan akan bisa kami lakukan dengan baik.
Ketika kami menerapkan perubahan ini, kami merasa bisa menanganinya

Q5-3.3. 74
dengan mudah
Kami memiliki keterampilan yang diperlukan untuk membuat perubahan
Q5-3.4. 75
ini berhasil.
Ketika kami menetapkan pikiran untuk sesuatu yang dapat kami pelajari
Q5-3.5. 76
yang akan diperlukan ketika perubahan ini di terapkan.
Pengalaman masa lalu kami membuat kami yakin bahwa kami akan dapat
Q5-3.6. 77
melakukan dengan sukses setelah perubahan ini dibuat.
Kami khawatir akan kehilangan sebagian status kami di organisasi ketika
Q5-4.1. 78
perubahan ini diterapkan.
Perubahan ini akan mengganggu banyak hubungan pribadi yang telah
Q5-4.2. 79
kami kembangkan.
Q5-4.3. 80 Masa depan kami dalam pekerjaan ini akan terbatas karena perubahan ini.
Saya memberikan perhatian yang besar demi berkembangnya inovasi di

Q6.1. 81 Area yang saya pimpin, seperti pencarian metode baru, solusi baru atau
jenis layanan baru.
Saya selalu menerkankan pentingnya inovasi untuk pengembangan
Q6.2. 82
perusahaan.
Saya mengusulkan rencana pengembangan inovasi di Area yang saya
Q6.3. 83
pimpin.
Saya mempromosikan kebutuhan untuk pengembangan dan pemanfaatan
Q6.4. 84
sumberdaya baru.
Saya mendorong pengembangan dan implementasi inovasi di Area yang
Q6.5. 85
saya pimpin.
Saya selalu berusaha untuk mencari solusi terhadap masalah yang
Q6.6. 86
dihadapi pelanggan melalui upaya inovasi.
Q6.7. 87 Saya mempromosikan pemikiran yang inovatif di lingkungan kerja saya.
Saya mendorong timbulnya ide-ide kreatif untuk menyelesaikan

Q6.8. 88
permasalahan pelanggan.
52
44
Personal and Branch Information
Data Pribadi
1. Posisi/ Jabatan: Kepala Cabang
Manager Operasional
Pengelola UPC (Unit Pelayanan Cabang)
Fungsional I
Fungsional II
2. Pendidikan: SMA
D3
S1
S2
S3
3. Jenis Kelamin: Laki-Laki
Perempuan
4. Usia : Di bawah 30
30-35 tahun
36-40 tahun
41-45
46-50
51-55
Di atas 55
5. Status Perkawinan: Menikah
Belum/ Tidak Menikah
Pernah Menikah
6. Jumlah Tanggungan: 0-3

4-6
>6
53
44
Data Cabang
1. Kode Cabang
2. Lama bekerja di cabang tersebut:
0-2 Tahun 3-5 Tahun > 5 Tahun
3. Lama bekerja di Pegadaian:

0-2
3-5
6-8
9-11
12-14
>15 tahun
4. Jenis Cabang: Konvensional

Syariah
5. Lama bekerja di cabang (-cabang) lain:
0-2
3-5
6-8
9-11
12-14
>15 tahun
6. Berapa prosentase pencapaian target OSL (Outstanding Loans) All Product bulan
Januari-Maret 2020
7. Berapa prosentase pencapaian Market Share All Product bulan Januari-Maret 2020
8. Berapa prosentase pencapaian new Product and Services bulan Januari-Maret 2020
54
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4.3 Sampling Technique

The researcher will use the expert evaluation method for wording test with two
branch managers as industry practitioners and two-person matching profile to respondent.
These activities to examine whether each questionnaire is well understood and relevant
to the research context. Then, the researchers will spread the questionnaires to the ten or
more pre-test respondents from industry practitioners. These studies using probability
sampling. Sampling Criteria describe as follow:
1. PT Pegadaian Branches
2. Conventional Type only
3. Have more than 50 unit in the same local area
4. A highly competitive and turbulence branch
Total sample for this study is about 982 (see table 4.2) and target sample is 200 branches
(20% from total). In the respondent selection, the researcher will choose the respondent’s
background as close as possible to the main study. Mostly, branches from the capital of
the Indonesian provinces as unit analysis for this study.
4.4 Data Collection
The source and data collection in these studies, in order to examine the digital
transformation and entrepreneurial orientation as organizational change determinants,
data collection process is:
1. Final questionnaire would be sent by email to respondents along with formal letter
from head of Graduate School of Management (PPIM FEB-UI) and introduction letter
from researcher.
2. Online survey website link, e.g google form.
3. Simplify survey operations
4. More comfortable to respondents
5. Response by email
55
44
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Appendix A
Concept Mapping of Article 11
Structural
Organicity
Entrepreneurial Market Strategic Learning

Orientation Responsiveness Capacity
Strategy
Formation
Mode
The direct effect of EO on strategic learning capability is confirmed from empirical results, 110 manufacturing firms. Support is found
for three constructs: (1) structural organicity, (2) market responsiveness, and (3) strategy formation mode that fully mediates the
EO and strategic learning capability relationship.
1
Anderson, Brian & Covin, Jeffrey & Slevin, Dennis. (2009). Understanding the Relationship Between Entrepreneurial Orientation and Strategic
Learning Capability: An Empirical Investigation. Strategic Entrepreneurship Journal. 3. 218 - 240.
68
44
Appendix B
A model explains the relationships between Strategic Organizational Change (SOC), leadership, learning, motivation, and productivity.
Describes SOC as an integrative process with all organization elements such as human resources, system, and technologies being
considered for successful change to occur.
2
Appelbaum, Steven & St-Pierre, Normand & Glavas, William. (1998). Strategic organizational change: The role of leadership, learning, motivation
and productivity. Management Decision. 36. 289-301.
69
44
Appendix C
Complex
Division of
Labor
Organic Organization
Structure Innovation
High Risk
Strategy
A complex division of labor, an organic structure, and a high-risk strategy produce consistent findings relative to organizational
innovation. The complexity of the division of labor is most important because it taps the organizational learning, problem-solving,
and creativity capacities of the organization.
3
Hage, Jerald. (1999). Organizational Innovation and Organizational Change. Annual Review of Sociology 25.
70
44
Appendix D
This study argues that exploratory and exploitative learning, can open the door to capturing opportunity and competitive advantage
through increased Innovation behavior and human capital accumulation. The intellectual capital (IC) theory has also confirmed that
social capital and relational capital will strengthen the relationship between innovation behavior and human capital.
4
Liu, Chih-Hsing. (2017). Creating competitive advantage: Linking perspectives of organization learning, innovation behavior and intellectual capital. International
Journal of Hospitality Management. 66. 13-23.
71
44
Appendix E
Key Themes
Openness
Digital
Transformation of
Affordances Innovation &
Entrepreneurship
Generativity
These studies identify three key themes related to digitization; (1) openness, (2) affordances, (3), and generativity. Beyond simply
opening new opportunities for innovators and entrepreneurs, digital technologies have broader implications for value creation and value
capture.
5
Nambisan, Satish & Wright, Mike & Feldman, Maryann. (2019). The digital transformation of innovation and entrepreneurship: Progress,
challenges and key themes. Research Policy.
72
44
Appendix F
This framework provides a foundation for the growing research on the interface between sertivization and Industry 4.0. Servitization is
mainly focused on adding value to the customer (demand-pull) while industry 4.0 is frequently related to adding value to process
(technology-push).
6
Frank, Alejandro & Mendes, Glauco & Ayala, Néstor & Ghezzi, Antonio. (2019). Servitization and Industry 4.0 convergence in the digital
transformation of product firms: A business model innovation perspective. Technological Forecasting and Social Change.
73
44
Appendix G
Summary of Review Articles
74
44
Appendix G
Summary of Review Articles
75
44
Appendix H
Synthesizing Conceptual Model (A)
76
44
Appendix H
Synthesizing Conceptual Model (B)
From the six articles, 7 we have generated a synthesized conceptual model (B) that combined the six concept mappings and determines
the research gap on digital transformation as independent variable and determinant as per the following figure:
7
See References
77
44
Appendix I
Potential New Research
From the six articles,8 we have generated a potential new research that combined the six concept mappings and determines the research
gap on digital transformation as independent variable and determinant as per the following figure.
8
See References
78
45
Appendix J
Description of Synthesizing Conceptual Model
1. The Theory of Constraints: “The Body of Knowledge”

From the first article, the direct effect of Entrepreneurial Orientation (EO) on strategic
learning capability is confirmed from empirical results. How and why EO contributes to strategic
learning capability is supported by three constructs: (1) structural organicity, (2) market
responsiveness, and (3) strategy formation mode. These three constructs fully mediate the EO to
strategic learning capability relationship (Anderson, 2009). According to Miller (1983), EO is a
strategic construct that reflects the extent to which firms are innovative, proactive, and risk-taking
in their behavior and management philosophies. Stated more concisely, EO is entrepreneurial in
their strategic posture (Covin and Slevin, 1989). The rapid development of the EO literature
reflects its centrality to both the strategic management and entrepreneurship fields. Related to the
second article, the three constructs of EO can strengthen the occurrence of Strategic
Organizational Change (SOC). SOC is described as an integrative process with all organizational
elements such as human resources, systems, and technologies to occur the successful changes
(Appelbaum, 1998). The model of SOC explains the relationships between Strategic
Organizational Change (SOC), leadership, learning, motivation, and productivity. Market
responsiveness is one of change determinant from the external environmental factor. Strategy
formation mode is also aligned with the organization's mission of strategy. Structural organicity
is one of the change processes. These three variables of EO will create strategic learning capacity,
which is also part of the change process in the Strategic Organizational Change model.
A complex division of labor, an organic structure, and a high-risk strategy to produce
consistent findings relative to organizational innovation as well as explain in the third article.
The complexity of the division of labor is most important because it taps the organizational
learning, problem-solving, and creativity capacities of the organization. These three factors of
organization innovation, a complex division of labor, an organic structure, and a high-risk
strategy, are the factors of the change process. Organization innovation defined as the adoption
of an idea or behavior that is new to the organization (Damanpour 1988, 1991, Daft & Becker
1978, Hage & Aiken 1970, Zaltman, Duncan & Holdek 1973, Oerlemeans et al. 1998, Wood
1998, Zummato & O'Connor 1992). Hage, J.T (1999), in the third article, explains that innovation
can either be a new product, a new service, a new technology, or a new administrative practice.
From the fourth articles, organizational learning is explained as a causal factor or independent
variable that can derive individual and firm's innovative behavior (Liu, Chih-Hsing, 2017). This
45
study argues, if the firm is open-minded about exploratory and exploitative learning, it can open
the door to capturing opportunity and competitive advantage through the increased innovative
behavior and human capital accumulation. The intellectual capital (IC) theory has also confirmed
that social capital and relational capital will strengthen the relationship between innovative
behavior and human capital.
The exploratory and exploitative learning, organizational capital, social capital, and human
capital, and opportunity capture are also the change process and included in the SOC model.
These organizational learning in the SOC model can create innovative behavior and, in the end,
can also create a competitive advantage as described in the result of article four (Liu, Chih-Hsing,
2017). The fifth article is "The digital transformation of innovation and entrepreneurship:
Progress, challenges and key themes" identify the three key themes related to digitization; (1)
openness, (2) affordances, and (3) Generativity (Nambisan et al., 2019). Beyond simply opening
new opportunities for innovators and entrepreneurs, digital technologies have broader
implications for value creation and value capture. Openness is nature and degree of openness
facilitated by digital technologies in innovation and entrepreneurship, in terms of who can
participate or the actors, what they can contribute in giving inputs, how they can contribute in a
process, and to what ends or outcomes. Affordances are an action potential or possibilities offered
by an object e.g. digital technology in relation to a specific user or use context in innovation and
entrepreneurship, for example, digital affordances, spatial affordances, institutional affordances,
social affordances. Generativity is a capacity exhibited by digital technologies to produce
unprompted change through 'blending' or recombination by large, varied, unrelated, unaccredited
and uncoordinated entities or the actors. Digital transformation, entrepreneurial orientation, and
organizational change dominate discussions from scholars to professionals in a high transition
economy from journal headlines to boardrooms in recent years. In the context of industry 4.0,
article six according to Frank, A.G. et al. (2019) provides a foundation for the growing research
on the interface Industry 4.0. is mainly focused on adding value to the customer (demand-pull)
and frequently related to adding value to process (technology-push).
2. Potential New Research from the "Body of Knowledge"

From the literature above, a new study to explore the role of Digital Transformation and
Entrepreneurial Orientation (EO) in achieving competitive advantage through Organizational
Change (OC) and Innovative behavior (IB) can be examined. It is a critical issue to have an
Organizational Change (OC) in a transition economy, but studies focusing on the comprehensive
explanation of the role of Digital Transformation (DT) and Entrepreneurial Orientation (EO) to
Organizational Change (OC) concepts are still limited. In order to fill the gap in the literature,
45
the potential new research and study can propose to elaborate strategic organizational change
using three fundamental questions: WHAT (what is the role of Digital Transformation and
Entrepreneurial Orientation to Organizational Change), WHY (why the role of Digital
Transformation and Entrepreneurial Orientation are crucial), HOW (how Digital Transformation
and Entrepreneurial Orientation will impact organizational change and how this OC will create
competitive advantage).
From the "body of knowledge" derived from the fifth articles, potential new research can
contribute and providing an understanding of OC definition, what essential elements to determine
OC, the requirement for the company to have an OC, as well as other OC development strategies.
Within the industry 4.0 era, which provides a concept shifting and connectivity to "sharing
economy," firms should have network capital and collaboratively working potential with the
internal and external of the firm. The development of OC must put network-based consideration
to cope with changes in this new fast-changing era. Digital transformation is the integration of
digital technology into all areas of a business, fundamentally changing how firms operate and
deliver value to its stakeholder. It is a change in behavior that requires organizations to
continually change and challenge the status quo and get comfortable with all the adjustment
processes. Openness is one of the key themes form the fifth article, which is related to nature and
a degree of openness facilitated by digital technologies in innovation and entrepreneurship. The
third key theme from the fifth article, with the Generativity, the firm can enhance its capacity to
produce unprompted change. Organizational change needs a digital transformation to create
innovative behavior. With innovative behavior, human capital, and organization that can cope
with change, competitive advantage can be derived. In the long term, it will enhance firm
performance and create a sustainability competitive advantage. The potential new study can
propose digital transformation and entrepreneurial orientation as the determinants of the
organizational change process to create innovative behavior and competitive advantage (Hage,
Jerald, 1999). Besides that, the comprehensive and holistic study about Organizational Change
from determinant factors and the drivers, the process, to the outcome is needed in this digital era
(Appelbaum, 1998; Nambisan et al., 2019). The digital transformation function in the
interconnected firm world is very crucial. With all the challenges and opportunities, it is a
survival issue for the organization to have an organizational change attitude for this digital-first
mindset.

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The Role of Digital Transformation and Entrepreneurial Orientation in

Achieving Competitive Advantage Through Organizational Change and

Philosophy of Science and Research Methods

PROGRAM PASCA SARJANA ILMU MANAJEMEN

TABLE OF CONTENT .................................................................................................................................. 2

Figure 2.1. Definition of Entrepreneurial Orientation .......................................................... 18

Figure 2.2. Theoretical Map .................................................................................................29

Figure 3.1 Research Model and Variable Operationalization ............................................... 31

Table 2.1 Summary of Existing Research on Organizational Change ................................................ 18

Table 4.1 Branches List of PT Pegadaian in Indonesia ...................................................................... 37

Table 4.2 Unit Analysis of Branches List PT Pegadaian in Indonesia ................................................ 38

Keyword: Organizational change, digital transformation, entrepreneurial orientation, innovative

1.1. Research Background

Digital transformation, entrepreneurial orientation, and organizational change dominate

1.2 Research Gaps

Based on the existing OC research, digital transformation, and entrepreneurial

1.3 Research Question

1.4. Research Contribution

The novelty of this study is to provide OC determinants. The role of digital

2.1. Theoretical Map

Figure 2.1. Definition of Entrepreneurial Orientation

The effect of EO on strategic learning capability is supported by three conditions: (1)

Table 2.1 Summary of Existing Research on Organizational for Change (OC)

Coyle-Shapiro U.K. supplier of electrical TQM program Longitudinal Employees Individual

Walker et al. Auto parts manufacturer Spinoff Cross-sectional Operative IA, IC

The definition of innovative behavior is a process and activity performed continuously,

THEORY OF THE GROWTH

Resource Based Theory (RBT)

Firm Resources Emergent Innitiative F

Entrepreneurial Orientation Organizational Change (OC)

Figure 2.2. Theoretical Map

3.1. Hypothesis Development

Figure 3.1. Research Model and Variable Operationalization

Entrepreneurial orientation (EO) is a firm-level strategic orientation that captures an

Entrepreneurial orientation will improve innovative behavior. The impact of

4.1 Unit of Analysis

In order to examine the digital transformation and entrepreneurial orientation as

Grand Total 2651 982 3633 452 160 612 1 1 4246

4.2 Operationalization of Variables

INO 1-7 PRO 1-5 RTA 1-6

APO 1-10 MSU 1-6 CEF 1-6 PBE 1-3

Figure 4.1. Operationalization of Variables

Constructs Dimensions Indicators and Coding Sources

Constructs Dimensions Indicators and Coding Sources

Proactiveness PRO1: In dealing with competitors, our company

Risk-Taking RTA1: In general, branch heads in our company have a

Constructs Dimensions Indicators and Coding Sources

Personally Beneficial PBE1: We worry that we will lose some of

Constructs Dimensions Indicators and Coding Sources

Perusahaan saya memiliki IT yang berfungsi sebagai penggerak utama

Perusahaan saya memiliki IT yang berfungsi sebagai pendukung untuk

Perusahaan saya sudah dapat menghasilkan pendapatan dari add-ons

Perusahaan saya sudah dapat menghasilkan pendapatan dari iklan pada

Perusahaan saya sudah dapat menghasilkan pendapatan dari produk

Dimasa mendatang, lingkup bisnis digital perusahaan saya akan mencakup

Dimasa mendatang, lingkup bisnis digital perusahaan saya akan mencakup

Kepala Wilayah adalah pejabat yang paling bertanggungjawab untuk

Kepala Divisi Bisnis Digital adalah pejabat yang paling bertanggungjawab

Kepala Divisi IT adalah pejabat yang paling bertanggungjawab untuk

Secara umum, top managers/ Kepala cabang di perusahaan saya

Secara umum, top managers/ Kepala cabang di perusahaan saya memiliki

Secara umum, top managers/ Kepala cabang di perusahaan saya memiliki

Secara umum, top managers/ Kepala cabang di perusahaan saya percaya